Jo Johnson, the brother of former UK Prime Minister Boris Johnson, has stepped down from the position of director at Elara Capital, the Financial Times reported on Thursday, citing a Companies House filing. Elara Capital is a London-based firm embroiled in the controversy related to the Adani Group. Elara had onboarded Johnson in June last year to tap into his expertise on investments in technology and education.
Johnson said in a statement that he had sought to contribute to UK-India trade and investment ties and that Elara had assured him of its good standing with regulatory bodies owing to its compliance levels. “I now recognise that this is a role that requires greater domain expertise in specialised areas of financial regulation than I anticipated and, accordingly, I have resigned from the board,” he said.
The company’s asset management business has come under scanner after US-based Hindenburg Research alleged that Mauritius-based funds run by the firm were complicit in manipulating share prices of Adani firms and concealing the scale of promoter holding, said the report.Citing two former Elara traders, the Hindenburg report said the transactions were routed via Mauritius to hide who was behind them, according to FT.
Adani Group has, meanwhile, refuted all allegations by the Hindenburg report and has also denied any association with either Elara or the offshore funds named by Hindenburg. The London-based capital markets firm was among the mandated bookrunners to Adani’s Rs 20,000-crore FPO that was abandoned late on Wednesday.
Elara’s subsidiaries operate from overseas, including India, with its funds registered in tax havens like Mauritius and Bermuda, despite the company having its base in the UK.
Elara was founded in 2002 by Raj Bhatt, who is also the majority shareholder. The firm did not respond to requests for comment, the FT report said.The report also mentioned Elara’s Mauritius-based funds Elara India Opportunities Fund and Vespera as being significant investors in Adani Group firms. It said, citing S&P Global Intelligence, that Elara’s asset management arm was Adani Enterprises’ third-largest shareholder, holding 5.1% as of mid-2021.
In addition, citing Trendlyne data, it said that as of December, 99% of the $3-billion investment that Elara India Opportunities Fund had made in listed Indian entities was contributed by Adani entities.
Elara was also associated with the likes of economist Lord Meghnad Desai, who was onboarded as non-executive director.
Responding to the allegations, Lord Desai said they were “very vague” but that he had contacted the financial regulator in Mauritius as well as Bhatt to seek more information, FT reported.