Hindenburg report did not impact US govt’s decision to finance Adani’s terminal venture in Colombo: Report

Hindenburg’s report alleging corporate fraud against the Adani Group did not affect the US government’s decision to extend a container terminal project in Sri Lanka to the Indian billionaire, Bloomberg reported, quoting a senior American government official.

He said that the report was not relevant with regards to the International Development Finance Corp (DFC) extending around $553 million for a container terminal project in Colombo in November.

The Colombo terminal project is partly owned by the Adani Group, which has a 51 per cent stake in the west container terminal,whereas the east terminal is run by China Merchants Port Holdings Co Ltd.

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The official from the DFC told Bloomberg that the accusations in the report, labelling Adani's actions as "the largest con in corporate history," were found not to be applicable to Adani Ports & Special Economic Zone Ltd., the subsidiary leading the Sri Lankan initiative.

The DFC handed out the project after conducting due diligence on the conglomerate, the official was quoted as saying.

US agency to continue monitor Indian firm

The US agency will also continue to monitor the Indian firm to ensure the US government doesn’t unintentionally support financial misconduct or other inappropriate behaviour, the official said, noting that the US must approach infrastructure projects differently than China

The Adani Group has been embroiled in a controversy ever since US-based Hindenburg Research report claimed that it indulged in corporate misgovernance, stock manipulation, among others.

The report wiped out around $100 billion from the Adani Group's market value earlier this year.

Adani Group performing well in stockmarket

The Adani Group, however, has continued to deny the allegations featured in the report.

Though the Indian agencies have launched a probe into the wrongdoings, they have not yet uncovered any of the claims mentioned in the report. Lately, Adani stocks have rallied, and Adani Ports and Special Economic Zone Ltd. has gained 7.4 per cent so far this year.

The $553 million in private-sector loans for the West Container Terminal is expected to expand the capacity of Colombo Port, which is operating at more than 90 per cent capacity utilisation since 2021.

(With inputs from agencies)