© Reuters. The logo of the Adani Group is seen on the facade of its Corporate House on the outskirts of Ahmedabad, India, January 27, 2023. REUTERS/Amit Dave
(Reuters) – Index provider MSCI said on Saturday it was seeking feedback on Adani Group and associated securities and was aware of a report issued by short-seller Hindenburg Research.
Seven listed companies of the Adani conglomerate – controlled by one of the world’s richest men Gautam Adani – have lost a combined $48 billion in market value and U.S. bonds of Adani firms have fallen since Hindenburg on Tuesday flagged concerns about debt levels and the use of tax havens.
“MSCI is closely monitoring publicly available information regarding the situation and the factors that may impact the eligibility of those relevant securities for the MSCI Global Investable Market Indexes,” it said in a statement.
Adani Group did not immediately respond to Reuters request for comment. It has dismissed the Hindenburg report as baseless and said it was considering whether to take legal action against the New York-based firm.
India’s capital markets regulator was studying the Hindenburg report as it may help its own probe into offshore fund holdings of Adani Group, Reuters reported on Friday.
Billionaire U.S. investor Bill Ackman on Thursday described the Hindenburg report “highly credible and extremely well researched”.
Read More MSCI Inc., a leading global index provider and analytics company, is seeking feedback from investors on the holding of Adani Group securities following claims made in a report released by short-seller Hindenburg Research.
The report, which was released on May 3rd, targeted Adani Enterprises and sought to discredit the Indian conglomerate’s efforts in combating climate change. It alleged a variety of misleading business practices, such as hiding its mining operations in other entities and overstating the success of its renewable energy investments, leading to Hindenburg’s conclusion of “massive environmental destruction, food security issues, and human rights violations.”
Although the claims made in the report remain unsubstantiated, the Adani Group has denied all the allegations and the Indian government has dismissed the statement as “false and malicious.”
In light of this uncertainty, MSCI is inviting investors to share their views on the matter and its potential impact on the Company’s overall financial performance. MSCI, which is one of the world’s largest providers of benchmark indices and is home to the MSCI India Index, said that it is “currently monitoring the situation” and will take into account all feedback when making future investment decisions.
This is not the first time MSCI has taken into account investor feedback when making decisions. The company has previously stated that it has a long-standing tradition of engaging with investors on ESG-related matters and of taking into account their feedback when making index decisions.
By seeking feedback from investors, MSCI is looking to ensure that its decisions are in line with their views. This is a welcomed step and demonstrates the company’s commitment to staying transparent and playing its part in improving corporate governance.
