Report: Maybank says no financial fallout from subscription to Adani’s share offering

MALAYAN Banking Bhd (Maybank) does not face any financial impact from its subscription to India’s Adani Enterprises’ share offering, the bank told a wire agency today.

Subscriptions to Adani Enterprises’ offering were client subscriptions and fully funded by client funds, the bank told Reuters in an emailed statement.

Marquee investors Maybank Securities and Abu Dhabi Investment Authority picked up a stake in Adani Enterprises’ US$2.45 billion (RM10.73 billion) secondary share offering on Jan 25, which coincided with a short-seller report that slammed the shares of Adani group companies, according to the report.

Meanwhile, Bloomberg reported that billionaire Gautam Adani’s (picture) 413-page attempt to restore confidence in his business empire is falling flat with investors, as stock-market losses deepen and key dollar bonds fall to fresh lows.

The report said that shares of all Adani Group firms slumped on Jan 30 despite the Indian conglomerate’s lengthy weekend rebuttal to allegations of fraud by short-seller Hindenburg Research. The three-day selloff has now erased nearly US$72 billion market value amid a share sale by Adani’s flagship that was meant to underline the tycoon’s ascension on the global stage.

While the Adani Group has portrayed Hindenburg’s allegations as baseless and an attack against India itself, the saga is reviving long-standing investor concerns about the conglomerate’s corporate governance. It also threatens to weaken broader confidence in India, until recently a top investment destination for Wall Street, and accelerate a nascent shift toward a reopening China.

“Not sure if Adani’s rebuttal is enough to assuage investor concerns. Just because things are disclosed and known, does not make them right,” Smartkarma analyst Brian Freitas told the news agency. “How does a group that big explain no analyst coverage and no mutual fund holdings?”

In its rebuttal published on Jan 22, Adani said that some 65 of the 88 questions have been addressed in the conglomerate’s public disclosures, describing the short seller’s conduct as “nothing short of a calculated securities fraud under applicable law”. It reiterated it will “exercise our rights to pursue remedies to safeguard our stakeholders before all appropriate authorities”.

In the latest twist, Hindenburg then said Adani’s rebuttal ignored all its key allegations and was “obfuscated by nationalism”. The conglomerate’s statement failed to specifically answer 62 of Hindenburg’s 88 questions, the short seller said on Jan 30, and conflated the company’s “meteoric rise” and the wealth of Asia’s richest man “with the success of India itself”.

The selloff is fast eroding the wealth of Adani, Asia’s richest man, after his stocks were some of the best performers last year not just in the local market, but also on the broader MSCI Asia-Pacific Index. — TMR