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Guatam Adani repaid 1.1bn loan.

 Gautam Adani, whose Indian busi­ness empire is under pres­sure over fraud alleg­a­tions, repaid a $1.1bn share-backed loan last week after facing a mar­gin call of more than $500mn, accord­ing to four people with dir­ect know­ledge of the mat­ter. Adani’s empire, which spans air­ports to energy, has been reel­ing since New York-based short seller Hinden­burg Research accused its last month of account­ing fraud and stock price manip­u­la­tion. The Adani group has denied the claims. However, the lenders of the $1.1bn loan, which included Barclays, Cit­ig­roup and Deutsche Bank, reques­ted last week that the bil­lion­aire top up the amount of stock pledged against the loan after a sharp fall in the shares of the lis­ted Adani com­pan­ies, accord­ing to the people with know­ledge of the mat­ter.


As the shares con­tin­ued to slide, Barclays informed Adani of a mar­gin call equi­val­ent to 50 per cent of the loan in cash, said the people who spoke on con­di­tion of anonym­ity. Rather than post cash against the loan, which did not mature until Septem­ber 2024, the Adani Group’s founder and his fam­ily opted to repay it com­pletely. Adani has not dis­closed the source of the funds used to repay the loan. Adani Group said it did not receive a formal request for a mar­gin call.


On Monday, Adani announced the early repay­ment of the loan in full, pitch­ing it as a pro­act­ive move to reduce lever­age. Adani declined to spe­cify which cor­por­ate or per­sonal entity was the bor­rower on the $1.1bn loan but referred the Fin­an­cial Times to a state­ment released earlier this week that said the pre­pay­ment was «in con­tinu­ation of the pro­moters’ com­mit­ment to reduce the over­all pro­moter lever­age». In India, pro­moters refer to founders or the people con­trolling a com­pany. Adani said the repay­ment would release 168mn shares in Adani Ports, 27mn in Adani Green Energy and 12mn in Adani Trans­mis­sion.


On Monday, mem­bers of the Con­gress party, India’s biggest oppos­i­tion group, demon­strated out­side par­lia­ment to demand answers about devel­op­ments at Adani, which was last week forced to with­draw a $2.4bn share offer­ing. Pro­test­ers also gathered near the state-owned Life Insur­ance Cor­por­a­tion of India and State Bank of India, which have expos­ure to Adani, call­ing for the gov­ern­ment to allow debate over the poten­tial loss of tax­pay­ers’ money. «The gov­ern­ment is scared about hav­ing a dis­cus­sion on Adani in par­lia­ment,» Rahul Gandhi, a Con­gress leader and mem­ber of par­lia­ment, said. On Tues­day, Gandhi slipped ref­er­ences to Adani into a speech respond­ing to an unre­lated pres­id­en­tial address.


The Hinden­burg report gave the cri­ti­cisms impetus, the res­ult of a two-year invest­ig­a­tion, which

Guatam Adani

accused the group of oper­at­ing a net­work of off­shore entit­ies to con­ceal the extent of the Adani fam­ily’s con­trol, skirt rules on hold­ings of lis­ted com­pan­ies, and boost stock prices. Adani rejec­ted the claims, brand­ing them base­less and a «cal­cu­lated attack on India» and its insti­tu­tions. Yet the gov­ern­ment has remained mostly silent about the crisis that is assail­ing India’s most prom­in­ent mag­nate while rais­ing ques­tions about the integ­rity of India’s cap­ital mar­kets. Last Wed­nes­day, as Adani’s scrapped share sale, grabbed head­lines, fin­ance min­is­ter Nirmala Sithara­man unveiled a busi­ness-friendly budget meant to show the gov­ern­ment’s eco­nomic com­pet­ence.

At the week­end, Sithara­man weighed in on Adani, say­ing reg­u­lat­ors would «do their job» in response to Hinden­burg’s alleg­a­tions and insist­ing that «our mac­roe­co­nomic fun­da­ment­als, our eco­nomy’s image. » Research­ers said that pro-gov­ern­ment social media users had swung into motion, with the hashtag #IStand­withAdani trend­ing on Twit­ter as nation­al­ists boos­ted a nar­rat­ive that described the Hinden­burg report as a con­spir­acy. Ex-crick­eter Virender Sehwag, a «proud Indian», claimed to his 23mn fol­low­ers that «the hit job on India’s mar­ket looks like a well-planned con­spir­acy». Jaggi Vas­udev, a spir­itual fig­ure known as Sad­hguru who has 4mn fol­low­ers, tweeted that for­eign «hit jobs on India’s eco­nomy» were a «cen­tur­ies-old» phe­nomenon.

«If shin­ing India is sore to some eyes, they need shades as India will surely rise & shine». Many Indi­ans asso­ciate Adani with the prime min­is­ter. In Janu­ary, the BBC aired a doc­u­ment­ary about Hindu-Muslim blood­let­ting that killed more than 1,000 in Gujarat in 2002, when Modi was chief min­is­ter. Online, many Indi­ans defen­ded Modi’s repu­ta­tion and attacked the film.

Near the Life Insur­ance Cor­por­a­tion HQ on Monday, a small group affil­i­ated with Con­gress posed with cash-stuffed suit­cases and held up a giant mock cheque made out to «Modi’s friend Adani». Indian polit­ics watch­ers doubted that the scru­tiny of Adani would have a decis­ive impact on Modi’s pop­ular­ity.

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