S&P Global Ratings placed its ESG evaluation for Adani Transmission Ltd (ATL) ‘under review’ on Thursday after US based short-seller Hindenburg Research raised governance issues at the group. ‘Under review’ is used by S&P to determine certain ESG Evaluations as being potentially affected by changing events, when it monitors environment, social and governance (ESG) evaluations. “We will closely monitor developments, including any investigations by the Indian regulators and any additional disclosures by the Adani group,” S&P Global Ratings said in a statement.
Adani Group has been accused by Hindenburg Research of stock manipulation and frauds. The Gautam Adani led group denied the allegations and called it ‘malicious’, ‘baseless’ and a ‘calculated attack on India’. The listed companies of the Adani Group lost over Rs 9 lakh crore within few days after the report got published. Most of the stocks were trading in green today, while Adani Transmission shares fell 1.37% to Rs 1,003.55 on NSE.
“The allegations related to group governance and disclosures may affect the appetite of fund providers and business partners in supporting ATL’s growth. This may raise financial and operational risks for the company,” the rating agency said. Adani Transmission
“Our current assessment of ATL’s governance factors in some controlling shareholder’s weight in decision-making, including on related-party transactions. Common parentage and name-sharing also expose ATL to reputational risks from the wider Adani group. We will assess the implications of the allegations on our ESG Evaluation,” it said.