Adani's London connection under scrutiny as UK watchdog launches probe: Report
Britain's financial regulatory body is monitoring "potential links" between the London-based investment firm Elara Capital and India's Adani Group, reports Financial News.
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.
A report from US-based short-seller activist firm Hindenburg Research claims that London-based Elara Capital "almost exclusively holds Adani Group stock" in some of its funds and has further ties to Adani. The report, published on 24 January, triggered an ongoing stock rout after accusing Adani of accounting fraud and stock manipulation.
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As former UK prime minister Boris Johnson's brother Jo leaves his board at the company, the FCA is looking into Elara. On 1 February, Johnson announced his resignation as the Adani stock tumbled.
Elara includes an FCA-authorised entity in the UK, as well as entities domiciled and regulated in India and Mauritius.
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.
Shares in Adani Enterprises, the flagship company of the Adani Group, plunged by 60% over the last month. Adani Enterprises cancelled a $2bn share sale in the wake of the rout, hitting back at Hindenburg's allegations in an unsuccessful bid to arrest its falling price.
The person familiar with the FCA's thinking noted the Adani Enterprises offering related to securities of an Indian listed company.
