The Adani Group - the world’s largest private coal operator - has been on a coal expansion spree thanks to generous funding by the world’s leading banks and investors. Global bond investors have pumped $9 billion into the group in the last 5 years and it was planning to raise an additional $10 billion of debt this year to fund its aggressive expansion of new coal projects. Those plans now hang under a cloud. Why?
Today, Adani stands accused of pulling “the largest con in corporate history” by activist shortseller Hindenberg Research. Hindenburg's report describes “brazen accounting fraud, stock manipulation and money laundering” across the group and puts a dazzling spotlight on Adani’s humongous debt, showing the group’s seven listed entities as over-leveraged and over-valued.
This is a company which already stands guilty of unabated coal expansion, fuelling climate change, destroying environment and natural wonders like the Great Barrier Reef and trampling on the rights of vulnerable, indigenous communities like Wangan and Jagalingou Traditional Owners in Australia and Adivasi people in Central India.
Since the report’s release, over USD $100billion has been wiped from the company’s value, with shares and bonds down amidst rampant selling and Gautam Adani has plummeted down the world's rich lists.
But big questions remain for the investors, insurers and banks that have long been funding Adani’s coal expansion. It’s only through their support that Adani has pulled off his ‘miracle’ growth. Growth that now hangs under a cloud of suspicion.
Our research reveals that Adani’s spectacular success has been bankrolled by some of the biggest names in finance. Adani keeps using this financial backing to justify its financial reputation, implying such investors would not have been involved in the company otherwise! It's a ploy that can no longer work for Adani and nor for the brands of the prestigious firms behind it. These investments have been exposed and some of Adani’s largest investors like TIAA, Blackrock, PIMCO and abrdn - can no longer justify their investments in Adani.
We wrote to 51 major investors including TIAA, Blackrock, PIMCO and abrdn, asking them to unequivocally stop buying Adani’s debt untill the company adopts a 1.5°C aligned energy transition plan. We are still waiting for them to break their silence on Adani.
As the scandal continues to spread we have seen action from a small number of investors like KLP (Norway’s largest pension fund) which has divested from Adani fearing it could “inadvertently finance the group’s coal investments” and S&P Dow Jones removed the group’s flagship company, Adani Enterprises, from its Sustainability Indices. This raises significant concerns whether investors like Blackrock, TIAA, PIMCO and abrdn- are serious about climate change and financial fiduciary.
Adani Group’s flagrant disregard for even the most basic standards of good corporate governance and transparency has been unmasked. It has escalated investigations and actions into the group by various government regulators, credit rating agencies, banks, sustainability indices and investors. It is evidently clear that Adani cannot be trusted. Can banks and investors afford to continue to willingly keep their eyes and ears closed about Adani?
Members of the Toxic Bonds initiative sent letters to 51 major investors including Blackrock, TIAA, PIMCO and abrdn, urging them to deny debt to the Adani Group and divest all investments from the company, so that it cannot continue its reckless programme of coal expansion without a clear 1.5°C-aligned transition plan.
The #StopAdani movement, frontline Indigenous communities, and environmental and human rights advocates have been warning about Adani’s dodgy corporate behaviour for years, and have been calling on financial institutions to steer clear of Adani due to their coal expansion, climate change escalation and violation of human rights.
Over 60,000 people have called banks and investors like Blackrock, TIAA, PIMCO and abrdn to drop Adani. Adani’s devastating coal expansion has only been made possible because of trillions in financing from the world's most prestigious financial institutions.