S&P puts Adani Transmission’s ESG rating under review

S&P Global Ratings has placed Adani Transmission’s ESG evaluation ‘under review’ following Hindenburg Research’s damning report on the conglomerate led by Gautam Adani. “We will closely monitor developments, including any investigations by the Indian regulators and any additional disclosures by the Adani group,” S&P Global Ratings said in a statement on Thursday.

The agency places environment, social and governance evaluations ‘under review’ if they are potentially affected by changing events.

S&P said that the allegations related to group governance and disclosures may affect the appetite of fund providers and business partners in supporting ATL’s growth. “This may raise financial and operational risks for the company,” it said.

“S&P Global Ratings today placed its ESG Evaluation of 63 for India-based Adani Transmission Ltd. [ATL] under review. This follows recent allegations of significant governance issues at the Adani group of companies,” it said.

“Our current assessment of ATL’s governance factors in some controlling shareholder’s weight in decision-making, including on related-party transactions. Common parentage and name-sharing also expose ATL to reputational risks from the wider Adani group,” stated the rating agency, further adding that it aims to complete the review in the coming months.

Adani Transmission is India’s largest private electricity transmission and distribution company, with 74.19 per cent under the Adani family’s control.

Adani shares and bonds have been under immense pressure since Hindenburg Research released its report on January 24. It accused the conglomerate of stock manipulation and accounting fraud. The group denied all allegations and said that the short-seller had ulterior motives for releasing the “unverified” report. Listed companies of the group lost over $125 billion in market value in the last three weeks.

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