US-based short seller, Hindenburg Research, has unleashed a new report alleging the Chairperson of Securities and Exchange Board of India (SEBI) – Madhabi Puri Buch – and her husband invested in a scandal-ridden offshore fund linked to Adani Group.
- •Hindenburg also accused Madhabi Puri Buch of favoring Real Estate Investment Trusts (REITs) because of her husband’s ties to Blackstone, a private equity firm with investments in the country’s properties sector.
- •Madhabi Puri Buch and her husband have denied the allegations terming them baseless, but Hindenburg has maintained that SEBI’s investigation into Adani’s stock price manipulation was likely to be hampered by impartiality.
- •Adani Group is making inroads into Kenyan market through its subsidiaries – with proposed ownership-by-lease of the Jomo Kenyatta International Airport (JKIA) and the US$ 900 million project to construct power lines.
The lease proposal for JKIA, under PPP arrangement, resulted in massive uproar from Kenyans believing the deal was nefarious. Some contentious issues raised included the 30-year ownership clause, an 18% permanent equity of the airport after the period elapsed, and a looming employee retrenchment.
The Kenya Aviation Workers Union (KAWU) is set to issue a 7-day strike notice to the government today, demanding cessation of the deal. The airport workers have pledged to disable operations if their plea is not taken into consideration. They argued that Kenya Airports Authority (KAA) did not undertake a public participation process rendering the concession agreement illegal.
The government maintained that entering into the PPP deal would enable plans to cheaply refurbish the airport’s aging infrastructure, as well as build a new terminal and a runway amidst budgetary constraints. A Spanish consulting firm, ALG, issued reservations about the deal – citing that failure to uptake a competitive bidding process placed the government at a disadvantage by securing a terrible agreement.
For this reason, KAWU believes there is a mischievous angle to the Adani-KAA deal and the union is calling for the resignation of the authority’s officials. They have also questioned KAA’s motives in leasing the airport, believing there was enough revenue to fund expansion and renovation of the airport without need for a PPP deal.
Airport workers also fear their jobs are at stake if Adani pushes through with its proposal to restructure workforce at the facility. About 3,000 employees, the union said, would be affected if Adani replaced them.
Kenyans have also squinted at the possibility that dealing with a company with a reputation for corporate fraud will be a great risk not worth taking. Last year in January, Hindenburg Research reported Adani Group had manipulated stock prices – a revelation that led to a 10% fall in the group’s share price and a US$ 150 billion loss in market value.
Adani denied the allegations and 2023 saw a slow drag in investigations levelled against them. Most of these inquiries by Indian bodies concluded that Adani Group complied with regulations and was not involved in corporate fraud as alleged. The company’s share prices recovered by June this year.
In July this year, SEBI indicted Hindenburg Research for violating laws governing research analysts and accused the company of trying to sabotage an Indian company through propagation of misleading information. Hindenburg refuted these claims and hinted that SEBI was trying to protect Adani.
The latest revelation has unfurled a new storm in India’s political atmosphere, with Adani Group at the center of it. The company’s listed units have seen their share prices tank today – with Adani Enterprises share price falling by 1.16%, those of Adani Ports dropping by 2.14%, and Adani Power falling by 0.81%. These upsets are likely to continue gouging skepticism about Adani’s viability in the Kenyan market.
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