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Companies competing with Adani for ‘prized assets’ faced CBI, ED, IT raids: Congress

Akash Jha — Sat, 05 Aug 2023 13:34:02 +0000

On Saturday, the Congress referenced the BJP’s acquisition of a cement company as evidence that the government was abusing its investigative powers to “enrich” a small group of crony capitalists. Jairam Ramesh, general secretary of the Congress party, claimed that companies competing with the Adani Group for prized assets had been subject to CBI, ED, and Income Tax raids “that have dissuaded them from proceeding with their bids, and the assets have ultimately gone to Adani.”

In a statement, he added, “The Congress party had pointed out how the Adani Group has repeatedly profited from well-timed, Modi-made raids by investigative agencies on its business competitors in our Hum Adani ke Hain Kaun (HAHK) series of 100 questions for Prime Minister (Narendra) Modi.”

“The latest episode involves the takeover of Sanghi Industries by the Adaniowned Ambuja Cements,” Ramesh explained.

Timeline for you, Aap : On April 28th, 2023, it was reported that Shree Cement, India’s third-largest cement company, was in talks to acquire Sanghi Industries. Shree Cement is the target of five separate raids by the Income Tax Department on June 21st, 2023. Shree Cement drops out of the bidding for Sanghi Industries on July 19, 2023. The Congress leader said that on August 3, 2023, Adani-owned Ambuja Cements announced that it has acquired Sanghi Industries.

According to Ramesh, Sanghi’s mill in Sanghipuram, Gujarat, produces more clinker and cement than any other facility in India.

He further said that the Sanghipuram Port, which is linked to Adani, will help the company consolidate its hold on the port industry.

With 95% of probes focused at opposition politicians, agencies like the ED and CBI are not just being used to break up opposition parties and bring down opposition-ruled governments. The Rajya Sabha lawmaker claimed that the Adani Group was being given control of valuable assets like the Mumbai airport and the Krishnapatnam Port as a result of raids by these authorities.

Ramesh said the party is “very confident” that the promoters of Shree Cement will be “pressured” into saying that the raids had no impact on their decision to drop out of the bidding process.

Since the US research firm Hindenburg published claims of stock manipulation and financial irregularities against the Adani Group and requested answers from the government, members of Congress have been raising many questions on the Adani issue.

The Adani Group has often said that it did nothing improper and is therefore exonerated from the accusations made in the Hindenburg report.

The Adani controversy cancelled Parliament’s whole Budget session, with the opposition calling for a joint parliamentary investigation.

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Adani’s go-to bankers at Barclays turn cautious after Hindenburg

Akash Jha — Tue, 18 Jul 2023 07:04:08 +0000

Barclays Plc has been Indian business mogul Gautam Adani’s go-to bank for almost a decade, capitalising on a connection that was established when only a handful of international companies were collaborating with the then-emerging conglomerate.

The bank has reduced its exposure to India after an explosive report by short-seller Hindenburg Research in January, leaving a gap in an Indian business that had been a significant driver of the firm’s Asian expansion for years.

A regulatory investigation of the company’s dealings with Adani is expected to wrap up next month, and as a result, high-ranking executives are reportedly taking a more cautious approach to acquiring new business. Although Barclays is still willing to work with the company, the bank has reportedly negotiated repayment on several loans, including funding for a huge cement transaction struck with Holcim AG last year.

Adani’s predicament exemplifies the difficulty for international financial institutions in striking a balance between pursuing profitable and possibly dangerous clients in emerging nations like India. Barclays’ income in Asia has increased by a factor of six in the last few years, with India being the region’s fastest-growing market.

Mark Mobius of Mobius Capital Partners LLP, an investor in emerging countries, said, “It’s a very tough choice since Adani may turn out to be a winner and the banks certainly want to be associated with winners.” A bank may have trouble breaking up the partnership because of the size of the sums involved.

The withdrawal is causing friction within the company, said the people, who requested anonymity because they were discussing sensitive business topics. After a decline in Adani business, Indian banks are eager to resume working with the conglomerate again. Executives in London, they added, are more wary because of reputational implications.

Adani has refuted Hindenburg’s claims. In a statement to Bloomberg News, the company assured investors and creditors that their money and their exposure to the Adani portfolio firms were safe. Adani claimed that banks still had “strong association with us” despite the Hindenburg report, citing data centre financing from last month. The group of lenders that comprised ING Bank NV, Mizuho Bank, MUFG Bank, Natixis SA, Standard Chartered Plc, and Sumitomo Mitsui Banking Corp. did not include Barclays.

A representative at Barclays Bank remarked, “We note there are many factual inaccuracies, but we do not comment on rumour and speculation.” Not much else was said.

Barclays Ties

Barclays’ ties to the group stand out among the many foreign firms that have stepped forward in recent years to assist fund Adani as the billionaire’s empire expanded. These firms include Standard Chartered, Mitsubishi UFJ Financial Group Inc., and Deutsche Bank AG. The UK company was one of the first international bankers to develop connections with Adani in India, and it is the only major bank with its Asia-Pacific headquarter located in the region.

Until the current break, the connection was fruitful. From 2016 to 2021, Barclays arranged the most total bonds for the group, and it has also been one of the most important loan providers, behind Standard Chartered and MUFG. When it comes to mergers advisory, the company has been number one in India for the past 12 months.

Bond placement fees and loans to Adani and other Indian companies, such as Mukesh Ambani’s Reliance Industries Ltd., have helped the bank increase its Asian revenue to more than 5% of its total, up from just 2.5% five years ago, despite slower growth in business for some global rivals in the region.

In an interview with Bloomberg Television in April, C.S. Venkatakrishnan, CEO of Barclays, noted that Adani “seems to have taken quite a lot of steps to improve its own financial position, so that’s good.”

The bank, according to Venkatakrishnan, would maintain its investments in his home country of India.

He remarked, “We have long had a very strong investment-banking presence in India, it has contributed well to us.”

The importance of India to Barclays was highlighted in 2016 when CEO Jes Staley visited with Prime Minister Narendra Modi. Staley was quoted as saying during his trip that the company intended to expand its back office operations in the country in preparation for future expansion there.

Jaideep Khanna, a 22-year veteran of Barclays who was appointed CEO of Asia-Pacific in 2017, is largely responsible for the bank’s impressive growth in India. Khanna manages the division from an eighth-floor office in Mumbai’s Ceejay House, one of the best buildings in India’s financial hub, whereas most Asia bank chiefs are headquartered in Hong Kong or Singapore.

With Khanna at the helm, Barclays has been able to keep strong ties with Adani and the rest of India’s rising corporate titans. Khanna is Adani’s speed-dial banker for significant financial projects, the individuals said, adding that he has a team overseeing the group’s connection.

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According to Khanna’s remarks in a 2021 interview with Bloomberg, Barclays is “probably the only international bank of our size and stature that has the regional CEO based out of India – that gives a sense of how important India is.”

After receiving a $400 million capital infusion two years ago — the largest since it entered the nation in 1990 — Barclays’ local unit was able to take on more exposure in India via loans and credit secured by shares.

India is home to more than 24,000 Barclays employees, making it the company’s largest single location outside of the United Kingdom. That makes it a significant foreign bank employer in India. Last year, India was the fourth most profitable region for Barclays worldwide, after the United Kingdom, the United States, and Ireland. The corporate and private banking sectors in India are more than twice as large as their counterparts in Singapore and Japan.

Barclays, together with Deutsche Bank and Standard Chartered, was a principal banker in Adani’s recent $6.5 billion transaction to acquire Holcim’s cement holdings in India.

In an interview with the Economic Times of India from last year, Jugeshinder “Robbie” Singh, Adani’s CFO, indicated that Barclays was a “trusted sounding board” in regards to the Holcim takeover, giving both financing and merger assistance.

According to data provided by Bloomberg, in the 12 months leading up to April, Barclays’ acquisition propelled them to the top of the rankings for mergers advisory in India, surpassing JPMorgan Chase & Co.

With fewer deals from Adani, the bank must now find alternative ways to make money in India. Since the release of the Hindenburg report, the company has not issued any offshore bonds, and it has been increasing its reliance on loans as a result of the rising cost of capital.

According to a statement sent to Bloomberg by Adani, the bank’s exposure to Adani portfolio companies as of March 31 places it at the seventh spot. No definition of “exposure” was provided.

Barclays’ investment bank has been the primary conduit through which the bank has transacted with Adani, facilitating the sale of bonds and the issuance of loans that are not carried on the bank’s balance sheet and are often sold off. Japanese and Middle Eastern banks are among those with the most direct exposure to Adani’s debt, the people added.

Stocks and bonds issued by Adani have recovered some of their losses since the group acquired an investment from GQG Partners Inc. No evidence of stock-price manipulation, as claimed by the US short seller, was discovered in a preliminary report from an Indian court panel in May.

To further strengthen its financial sheet, the company has repurchased bonds, repaid loans, and is actively selling shares. According to the sources, it has repaid the banks $200 million of the $1 billion mezzanine loan it received to acquire the Holcim properties. The initial loan was funded by Barclays, Deutsche Bank, and Standard Chartered. After certain banks refused to refinance Adani’s request to purchase Holcim, the company repaid a $500 million bridge loan to the original banks in March.

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Adani Row: Supreme court suggests formation of panel,Asks SEBI to protect investors

Ashish Ranjan — Fri, 10 Feb 2023 13:05:03 +0000

On Friday, the Supreme Court proposed the formation of a team of specialists, including a judge, to study the effect of the fraud charges against the Adani Group, which have wiped off crores of investor capital and prompted heated attacks on the government by the opposition.
Chief Justice DY Chandrachud remarked, in response to a petition requesting Supreme Court action in the dispute, “Do we intervene and have a framework in place to prevent this from happening again? We do not wish to discuss policy issues. This pertains to the government.”

“We have offered an expert committee for the overall situation and examination if the Indian government is interested in this exercise,” he said, requesting the involvement of a judge and subject matter specialists.

“We have conveyed to the Solicitor General our concern regarding the regulatory process and the need to ensure that Indian investors are protected in light of the recent occurrence,” the Chief Justice said, demanding “a concise summary of the facts and applicable regulations.”

“The Solicitor General asserts that SEBI (Securities and Exchange Board of India) is making every effort to maintain vigilance. We are not casting doubt on any regulatory structure. We are having a conversation on this issue “said Justice Chandrachud.

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Tushar Mehta, the Solicitor General, said the court that he would return on Monday with a proposal after talking with the SEBI, the finance ministry, and other ministries. The SEBI is examining the situation from a regulatory standpoint, he stated.

Since the January 24 report by US-based short-seller Hindenburg Research, which accused the ports-to-energy Adani Group of improper use of offshore tax havens and stock manipulation, shares in its seven companies have lost more than $100 billion in market value. The Adani Group is controlled by billionaire Gautam Adani, one of the world’s richest people.
Adani has refuted the allegations, calling the reputational attack “maliciously mischievous.” Adani Enterprises, the group’s flagship company, withdrew its secondary share offering, India’s largest ever, due to the steep sell-off last week.

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