Business

Adani wins court relief in New Delhi on scrutiny after Hindenburg attack

Published

5 months ago

January 3, 2024

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Adani wins court relief in New Delhi on scrutiny after Hindenburg attack

India Supreme Court on Wednesday said Adani Group does not need to face more investigations beyond the current scrutiny of the market regulator, a major relief for the conglomerate hit hard by a US short-seller’s allegations of wrongdoing.

The Securities and Exchange Board of India (SEBI) has been probing the Adani group, led by billionaire Gautam Adani, after Hindenburg Research in January 2023 alleged improper use of tax havens and stock manipulation by the group.

The Adani Group denied those allegations, but Hindenburg’s report still chopped $150 billion off its stock market value.

Read more: Fascism needs a controlled media: Modi’s favourite Adani acquires majority stake in news agency IANS

Though some investor confidence returned in recent months as Adani won the backing of bankers and investors, the Hindenburg saga and the regulatory scrutiny have weighed on the group’s business dealings and reputation.

The Supreme Court, which was ruling on cases brought by public interest litigants seeking a special investigation team to probe the matter, said “the facts of this case do not warrant” such a change, even though the court had the powers to transfer the investigation.

The verdict signals there will not be increased regulatory or legal risk on the Adani group beyond the current SEBI investigation.

Reflecting that view, shares of various Adani Group companies rose, with Adani Energy Solutions up 9.1 per cent, Adani Total Gas surging 7.1 pc, Adani Green Energy jumping 5.5pc and the flagship business Adani Enterprises rising 2.6pc.

The court, which was overseeing the SEBI probe, also said there was no need for it to order any changes in the country’s disclosure rules for offshore funds. Hindenburg had alleged Adani’s offshore shareholders were used to violate certain SEBI rules, even though the company maintained it complies with all laws.

After the Supreme Court ruling, Adani said on social media platform X that the court’s judgment shows truth has prevailed and the group’s “contribution to India’s growth story will continue.”

Read more: Indian opposition parties protest against Adani’s Mumbai slum overhaul plan

“Post this verdict global investors will have more confidence in investing in the shares of the company,” said Deven Choksey, managing director of KRChoksey Shares and Securities Pvt Ltd, a broker.

The regulator had previously informed the Supreme Court that it would take appropriate action based on the outcome of its investigations. The court on Wednesday gave SEBI three months to complete its investigations.

The Supreme Court on Wednesday also said that it does not need to intervene in the current regulations governing offshore investors of Indian companies. SEBI tightened those regulations in June by making disclosures more stringent to bring clarity to opaque corporate structures.

Under Indian law, every company needs to have 25pc of its shares held by public shareholders to avoid price manipulation, but Hindenburg alleged that some of Adani’s offshore shareholders were used to violate this rule. Adani has said it complies with all laws.

“The procedure followed in arriving at the current shape of the regulations does not suffer from irregularity,” the court said on Wednesday, while backing SEBI’s regulatory position on foreign portfolio disclosures.

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Business

Star Entertainment says Hard Rock-led group weighs bid, shares surge

Published

1 day ago

May 20, 2024

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Star Entertainment says Hard Rock-led group weighs bid, shares surge

Star Entertainment (SGR.AX), opens new tab said on Monday a consortium led by Florida-based Hard Rock Hotels & Casinos is considering a bid for the cash-strapped Australian firm, sending its shares 20% higher.

A potential takeover by entertainment giant Hard Rock would provide a much-needed financial lifeline to Star, which has been plagued by a regulatory inquiry into its flagship Sydney casino operation and an executive exodus.

Star, which had a market value of A$1.29 billion ($863.66 million) as of Monday’s close, said it has been approached by a consortium of investors which includes Hard Rock Hotels & Resorts (Pacific).

The company said it understands Hard Rock Hotels is a local partner of Hard Rock.

Earlier in the day, Star said it had received “inbound interest from a number of external parties” but flagged none of them had yet resulted in “substantive discussions”.

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Business

Red Lobster seeks bankruptcy protection with $100 mln in financing commitments

Published

1 day ago

May 20, 2024

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Red Lobster seeks bankruptcy protection with $100 mln in financing commitments

U.S.-based restaurant chain Red Lobster has filed for Chapter 11 bankruptcy protection in a Florida court after securing $100 million in financing commitments from its existing lenders, the company said on Sunday.

The company listed its assets and liabilities to be between $1 billion and $10 billion, according to a court filing.

Red Lobster said its restaurants will be open and operate as usual during the bankruptcy proceedings, and plans to reduce its locations as well as pursue a sale of substantially all its assets.

The restaurant chain also said it has entered into a “stalking horse” purchase agreement to sell its business to an entity formed and controlled by its existing term lenders.

“This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth,” said Jonathan Tibus, CEO of Red Lobster.

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Business

BMW imported 8,000 vehicles into US with parts from banned Chinese supplier, Senate report says

Published

1 day ago

May 20, 2024

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BMW imported 8,000 vehicles into US with parts from banned Chinese supplier, Senate report says

German automaker BMW (BMWG.DE), opens new tab imported at least 8,000 Mini Cooper vehicles into the United States with electronic components from a banned Chinese supplier, a U.S. Senate report released on Monday said.

A report by Senate Finance Committee Chairman Ron Wyden’s staff said BMW imported 8,000 Mini Coopers with parts from a Chinese supplier banned under a 2021 law and that BMW continued to import products with the banned parts until at least April.

BMW Group said in an email it had “taken steps to halt the importation of affected products.”

The company will be conducting a service action to replace the specific parts, adding it “has strict standards and policies regarding employment practices, human rights, and working conditions, which all our direct suppliers must follow.”

Congress in 2021 passed the Uyghur Forced Labor Prevention Act (UFLPA) law to strengthen enforcement of laws to prevent the import of goods from China’s Xinjiang region believed to have been produced with forced labor by members of the country’s Uyghur minority group. China denies the allegations.

“Automakers’ self-policing is clearly not doing the job,” Wyden said, urging the Customs and Border Protection agency to “take a number of specific steps to supercharge enforcement and crack down on companies that fuel the shameful use of forced labor in China.” Customs and Border Protection did not immediately comment.

The report found that Bourns Inc, a California-based auto supplier, had sourced components from Sichuan Jingweida Technology Group (JWD). That Chinese company was added to the UFLPA Entity List in December, which means its products are presumed to be made with forced labor.

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