Adani’s London connection under scrutiny as UK watchdog launches probe: Report
1 min read . Updated: 08 Feb 2023, 07:43 AM IST
PremiumThe Financial Conduct Authority (FCA) in the UK has launched a probe against Adani Group and Elara Capital.
Elara Capital, a London-based company reported to have connections to Adani Group, and the Indian conglomerate itself are being watched by the Financial Conduct Authority (FCA) in the UK.
Although the allegations mostly centre on group firms outside of the UK, the FCA is looking into potential UK connections around Elara, according to sources familiar with the situation who spoke to Financial News.
As former UK prime minister Boris Johnson's brother Jo leaves his board at the company, the FCA is looking into Elara. On February 1, Jo Johnson announced his resignation as the Adani stock tumbled.
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The individual with knowledge of the FCA's reasoning pointed out that the Adani Enterprises sale concerned securities of an Indian listed firm. Livemint could not independently verify the developments.
Raj Bhatt, CEO and head of Elara, founded the company in 2002 with the primary goal of raising financing for Indian corporates. Additional locations for Elara Capital include Singapore, Mauritius, New York, Ahmedabad and Mumbai. On its website, it lists asset management, sales and trading, research and analysis, and investment banking as some of its services.
Following the rout, Adani Enterprises cancelled a $2 billion Follow-on Public Offering (FPO) and retaliated against Hindenburg's claims in an effort to stop its declining price. On the same day that the Adani Group announced the cancellation of the FPO, Johnson announced his resignation from the company.
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“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," Johnson said.
Since the report on January 24, Adani's market value has decreased by more than $100 billion. Adani has refuted all charges.
Elara was mentioned by US-based Hindenburg Research in a study raising doubts about the Adani Group's financial stability. The Indian company has refuted the short seller's charges of financial fraud at Adani, but they have caused a stock rout across all of the Adani entities.
