Adani appoints Grant Thornton for audit to come clean on Hindenburg allegations
New Delhi (PTI): Embattled Adani group has appointed accountancy firm Grant Thornton for an independent audit of some of its companies in a bid to come clean of the damning allegations levelled by the US short-seller Hindenburg Research and to assure investors and regulators.
Sources said the audit is primarily to show to regulators like the Reserve Bank of India (RBI) that the group has nothing to hide and it is in compliance with relevant laws.
The audit will specifically look into if there was any misappropriation or repatriation of funds and if loans were used for any purpose other than the one they were intended for.
The audit, they said, would go a long way to show that the books are healthy and project executions are on track - something that the investors are keenly watching given the damage to market value that the Hindenburg report has caused.
As the run on its shares continued, Adani Group had on Monday attempted to calm the market, saying its growth plans are intact, business plans are fully funded and it remains confident of delivering returns to shareholders.
Market value of the group's seven listed companies has halved since the January 24 report by the US-based short-seller Hindenburg Research alleged that Adani pulled "the largest con in corporate history" using offshore tax havens and stock manipulation.
The group has denied all allegations, calling them "malicious", "baseless" and a "calculated attack on India". It called Hindenburg the "Madoffs of Manhattan", referring to the late financier and fraudster Bernie Madoff.
"Balance sheet of each of our independent portfolio companies is very healthy," the group spokesperson had said. "We have industry leading development capabilities, strong corporate governance, secure assets, strong cash flows, and our business plan is fully funded."
The group debunked reports of a cut in growth goal and capex. Projects may be delayed but none is shelved or deferred and plans for expansion of solar, green hydrogen and airports were on track.
"Once the current market stabilizes, each entity will review its own capital market strategy, be rest assured, we are confident in the continued ability of our portfolio to deliver superior returns to shareholders," the spokesperson added.
The Adani crisis has sparked worries of financial contagion in India and ability to carry on infrastructure projects.
Last week, French oil major TotalEnergies said it would wait for the result of an independent audit before proceeding with investing in Adani Group's USD 50 billion plans to make green hydrogen.
According to Bernstein Research, Adani Green is capable of paying off all its debt of Rs 22,000 crore due in the financial year ending in March 2025, if it divests some renewable energy assets, seeks fresh equity capital from existing investors, or cancels some planned projects and avoids bidding for new ones.
The spokesperson, however, termed questions over the group's ability to fund projects and refinance debt as 'unfounded speculation'.
Last week, Moody's Investors Service downgraded the ratings outlook for four Adani group companies to negative from stable, while index provider MSCI said it would cut the weightage of some of its stocks in its indices.
Finance Minister Nirmala Sitharaman on Saturday said the country's regulators are very experienced and are seized of the matter relating to the Adani Group crisis.
"India's regulators are very, very experienced and they are experts in their domain. The regulators are seized of this matter and they are on their toes as always, not just now," she had said.
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MP HC sets up judicial commission to probe water contamination in Indore
Indore (PTI): The Indore bench of Madhya Pradesh High Court on Tuesday set up a commission of inquiry comprising a former HC judge to probe the issue of water contamination in city's Bhagirathpura, saying the matter requires probe by an independent, credible authority and "urgent judicial scrutiny".
It also directed the commission to submit an interim report after four weeks from the date of commencement of proceedings.
A division bench of Justices Vijay Kumar Shukla and Alok Awasthi constituted the commission while hearing several public interest litigations (PILs) filed simultaneously regarding the deaths of several people in Bhagirathpura due to the consumption of contaminated water.
The HC reserved the order after hearing all the parties during the day, and released it late at night.
The state government on Tuesday told the HC that the deaths of 16 people in Indore's Bhagirathpura area was possibly linked to a month-long outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The government presented an audit report of 23 deaths from the current gastroenteritis epidemic in Bhagirathpura before the bench, suggesting that 16 of these fatalities may have been linked to the outbreak of vomiting and diarrhoea caused by contaminated drinking water.
The report, prepared by a committee of five experts from the city's Government Mahatma Gandhi Memorial Medical College, stated that the deaths of four people in Bhagirathpura were unrelated to the outbreak, while no conclusion could be reached regarding the cause of death of three other people in the area.
During the hearing, the high court sought to know from the state government the scientific basis behind its report.
The division bench also expressed surprise at the state government's use of the term "verbal autopsy" in relation to the report, sarcastically stating that it had heard the term for the first time.
The HC expressed concern over the Bhagirathpura case, stating that the situation was "alarming," and noted that cases of people falling ill due to contaminated drinking water have also been reported in Mhow, near Indore.
In its order, the HC said the serious issue concerning contamination of the drinking water supply in Bhagirathpura area allegedly resulted in widespread health hazards to residents, including children and elderly persons.
According to the petitioners and media reports, death toll is about 30 till today, but the report depicts only 16 without any basis or record, it said.
It is averred that sewage mixing, leakage in the pipeline, and failure of civic authorities to maintain potable water standards have led to the outbreak of water-borne diseases. Photographs, medical reports, and complaints submitted to the authorities prima facie indicate a matter requiring urgent judicial scrutiny, the HC said.
"Considering the gravity of the allegation and affecting the right to life under Article 21 of the Constitution of India and the need for an independent fact-finding exercise, the Court is of the opinion that the matter requires investigation by an independent, credible authority," it said.
"Accordingly, we appoint Justice Sushil Kumar Gupta, former judge of the Madhya Pradesh High Court, a one-man commission of inquiry into the issues relating to water contamination in Bhagirathpura, Indore, and its impact on other areas of the city," the HC added.
As per the order, the commission shall inquire into and submit a report on the cause of contamination -- whether the drinking water supplied to Bhagirathpura was contaminated; and the source and nature of contamination (sewage ingress, industrial discharge, pipeline damage etc).
The panel will also probe the number of actual deaths of affected residents on account of contaminated water; find out the nature of disease reported and adequacy of medical response and preventive measures; suggest immediate steps required to ensure safe drinking water as well as long-term infrastructural and monitoring reforms.
It will also identify and fix responsibility upon the officers and officials found prima facie responsible for the Bhagirathpura water contamination incident, and suggest guidelines for compensation to affected residents, particularly vulnerable sections.
The commission shall have powers of a civil court for the purpose of summoning officials and witnesses; calling up records from the government department, hospitals, laboratories and civic bodies; ordering water quality testing through accredited laboratories; conducting spot inspections.
All state authorities involving district administration, Indore Municipal Corporation, public health engineering department and Madhya Pradesh Pollution Control Board shall extend full co-operation and provide records as sought by the commission, it said.
The state government shall provide office space, staff, and logistical support to the commission, it said.
During the hearing in the day, the state government also presented a status report to the court in this matter.
According to reports, a total of 454 patients were admitted to local hospitals during the vomiting and diarrhea outbreak, of whom 441 have been discharged after treatment, and 11 are currently hospitalised.
According to officials, due to a leak in the municipal drinking water pipeline in Bhagirathpura, sewage from a toilet was also mixed in the water.
