Jo Johnson, former UK PM Boris Johnson's brother, resigns as director of UK firm with Adani ties
Johnson joined Elara Capital, a self-styled 'leading investment bank' for Indian companies looking to raise money overseas, in June last year, reported UK's Financial Times on Thursday
- Feb 2, 2023,
- Updated Feb 2, 2023 11:46 PM IST
Lord Jo Johnson, the former Conservative minister and brother of former UK prime minister Boris Johnson, has resigned as a director of a London-based firm with ties to the embattled Adani Group.
Johnson joined Elara Capital, a self-styled “leading investment bank” for Indian companies looking to raise money overseas, in June last year, reported UK's Financial Times on Thursday.
The firm was one of the 10 bookrunners for the Rs 20,000-crore share sale that Adani Group's flagship firm Adani Enterprises withdrew on Wednesday, a week after US short seller Hindenburg Research accused the ports-to-power conglomerate of stock price manipulation and accounting fraud.
Adani Group has denied the short-seller's accusations, saying the allegation of stock manipulation had "no basis" and stemmed from an ignorance of Indian law. It said it has always made the necessary regulatory disclosures.
Hindenburg alleged in its 106-page scathing report that Mauritius-based funds run by the London firm were part of a scheme to manipulate the stock price of Adani Group’s listed companies. Hindenburg's report also alleged an improper use of offshore tax havens by the Adani Group. It also raised concerns about high debt and the valuations of seven listed Adani companies.
Adani Group has denied Hindenburg’s accusations, calling them a “malicious combination of selective misinformation and stale, baseless and discredited allegations”. Adani Group has also rejected having any relationship with Elara and other offshore funds named by Hindenburg.
“Innuendoes that they are in any manner related parties of the promoters are incorrect,” said Adani Group noted in its over 400-page rebuttal of Hindenburg’s allegations.
Market losses in the group companies swelled to more than $100 billion on Thursday. Adani Enterprises' shares tumbled 27%, closing at their lowest level since March 2022.
Other group companies also lost more ground. Adani Ports and Special Economic Zone shed nearly 7%, while Ambuja closed up 5.5% after losing nearly 17% in the previous session.
"Two Mauritius-based Elara funds — the Elara India Opportunities Fund and Vespera — have been significant investors in Adani’s publicly traded companies. According to data from S&P Global Intelligence, Elara Capital’s asset management arm was the third-largest shareholder in Adani Enterprises with a 5.1 per cent stake in the summer of 2021.
"As of December, Adani groups accounted for 99 per cent of the $3bn the Elara India Opportunities Fund had invested in listed Indian companies, according to data provider Trendlyne," reported Financial Times.
A Member of Parliament between 2010-2019, Jo Johnson served as a senior Government Minister under three successive Prime Ministers, including as Head of the No10 Downing Street Policy Unit and Minister of State in the Cabinet Office; Minister of State for Transport; Minister for London; and Minister of State, attending Cabinet, for Universities, Science, Research & Innovation
Jo Johnson began his career as an investment banker with Deutsche Bank and later spent 13 years at the Financial Times, including as Head of Lex and Associate Editor. His foreign postings included over three years as the FT's South Asia Bureau Chief based in New Delhi and four years as the FT's Paris Correspondent.
His resignation, which was dated February 1, was disclosed in a filing at Companies House on Thursday.
In a statement released after the FT reported his resignation, Johnson said he had joined Elara to contribute to “UK-India trade and investment ties” and had “received assurances from Elara Capital that it is compliant with its legal obligations and in good standing with regulatory bodies”.
He added that “I now recognise that this is a role that requires greater domain expertise in specialised areas of financial regulation than I anticipated and, accordingly, I have resigned from the board.”
Elara has distinguished economist Lord Meghnad Desai as a non-executive director.
“My position is that whether the report is correct or not, the market believed it,” Desai said. “If it is correct that Elara was used as a vehicle indirectly by the Adanis then we have to worry about that. If this is not clarified by the government they [India] are going to have a serious problem attracting foreign capital.”
"Elara Capital has emerged as one of the leading investment banks for Indian companies looking at overseas fund raising and was ranked amongst the top investment banks in the Bloomberg league tables," said a report in June 2022.
Boris Johnson met Gautam Adani in April 2022 when Boris was in Ahmedabad on a two-day India visit.
Lord Jo Johnson, the former Conservative minister and brother of former UK prime minister Boris Johnson, has resigned as a director of a London-based firm with ties to the embattled Adani Group.
Johnson joined Elara Capital, a self-styled “leading investment bank” for Indian companies looking to raise money overseas, in June last year, reported UK's Financial Times on Thursday.
The firm was one of the 10 bookrunners for the Rs 20,000-crore share sale that Adani Group's flagship firm Adani Enterprises withdrew on Wednesday, a week after US short seller Hindenburg Research accused the ports-to-power conglomerate of stock price manipulation and accounting fraud.
Adani Group has denied the short-seller's accusations, saying the allegation of stock manipulation had "no basis" and stemmed from an ignorance of Indian law. It said it has always made the necessary regulatory disclosures.
Hindenburg alleged in its 106-page scathing report that Mauritius-based funds run by the London firm were part of a scheme to manipulate the stock price of Adani Group’s listed companies. Hindenburg's report also alleged an improper use of offshore tax havens by the Adani Group. It also raised concerns about high debt and the valuations of seven listed Adani companies.
Adani Group has denied Hindenburg’s accusations, calling them a “malicious combination of selective misinformation and stale, baseless and discredited allegations”. Adani Group has also rejected having any relationship with Elara and other offshore funds named by Hindenburg.
“Innuendoes that they are in any manner related parties of the promoters are incorrect,” said Adani Group noted in its over 400-page rebuttal of Hindenburg’s allegations.
Market losses in the group companies swelled to more than $100 billion on Thursday. Adani Enterprises' shares tumbled 27%, closing at their lowest level since March 2022.
Other group companies also lost more ground. Adani Ports and Special Economic Zone shed nearly 7%, while Ambuja closed up 5.5% after losing nearly 17% in the previous session.
"Two Mauritius-based Elara funds — the Elara India Opportunities Fund and Vespera — have been significant investors in Adani’s publicly traded companies. According to data from S&P Global Intelligence, Elara Capital’s asset management arm was the third-largest shareholder in Adani Enterprises with a 5.1 per cent stake in the summer of 2021.
"As of December, Adani groups accounted for 99 per cent of the $3bn the Elara India Opportunities Fund had invested in listed Indian companies, according to data provider Trendlyne," reported Financial Times.
A Member of Parliament between 2010-2019, Jo Johnson served as a senior Government Minister under three successive Prime Ministers, including as Head of the No10 Downing Street Policy Unit and Minister of State in the Cabinet Office; Minister of State for Transport; Minister for London; and Minister of State, attending Cabinet, for Universities, Science, Research & Innovation
Jo Johnson began his career as an investment banker with Deutsche Bank and later spent 13 years at the Financial Times, including as Head of Lex and Associate Editor. His foreign postings included over three years as the FT's South Asia Bureau Chief based in New Delhi and four years as the FT's Paris Correspondent.
His resignation, which was dated February 1, was disclosed in a filing at Companies House on Thursday.
In a statement released after the FT reported his resignation, Johnson said he had joined Elara to contribute to “UK-India trade and investment ties” and had “received assurances from Elara Capital that it is compliant with its legal obligations and in good standing with regulatory bodies”.
He added that “I now recognise that this is a role that requires greater domain expertise in specialised areas of financial regulation than I anticipated and, accordingly, I have resigned from the board.”
Elara has distinguished economist Lord Meghnad Desai as a non-executive director.
“My position is that whether the report is correct or not, the market believed it,” Desai said. “If it is correct that Elara was used as a vehicle indirectly by the Adanis then we have to worry about that. If this is not clarified by the government they [India] are going to have a serious problem attracting foreign capital.”
"Elara Capital has emerged as one of the leading investment banks for Indian companies looking at overseas fund raising and was ranked amongst the top investment banks in the Bloomberg league tables," said a report in June 2022.
Boris Johnson met Gautam Adani in April 2022 when Boris was in Ahmedabad on a two-day India visit.