The CEO of Norway's $1.3 trillion oil fund said the world's largest sovereign wealth fund has slowed stakes in Adani Group companies because of the complex situation that is attached to the ports-to-power conglomerate.
We have sold a number of Adani companies and reduced some of them. Nicolai Tangen told the Financial Times that we have very little exposure because we have very little exposure compared to what you would expect us to have.
The FT report came on Tuesday at a time when Adani Group's flagship firm Adani Enterprises' Rs 20,000 crore FPO sailed through in a dramatic fashion on the last day of the share sale after the group's stocks tanked due to a short-seller's report.
Hindenburg Research's report last week alleged improper use of offshore tax havens and concerns about high debt, which Adani denied, but the subsequent market meltdown has resulted in a dramatic and sudden fall in group chairman Gautam Adani's fortunes.
Tangen said the oil fund reduced its positions in Adani companies because of the risks such as potential corruption, environmental damage and human rights abuses.
It is a complex situation. We have a separate department that is looking at risk-based divestments. We started to look at this a long time ago, and so we have taken a lot of exposure out. The oil fund, which usually holds 1.3 per cent of a stock, had holdings of 0.3 per cent in Adani Ports and Special Economic Zone at the end of 2022, 0.17 per cent in Adani Total Gas and 0.14 per cent in Adani Green Energy.
At the end of 2019, the fund had a 0.75 per cent stake in Adani Ports, which it has placed on its observation list because of its relationship with armed forces in Myanmar.
In August 2021, APSEZ said that its investment in a port in Myanmar was not in violation of any sanctions issued by the Office of Foreign Assets Control OFAC of the US Department of Treasury.
The project had run into controversy after it was reported that APSEZ chief executive Karan Adani had met Senior General Min Aung Hlaing, the army chief who had led a coup against the elected government in July 2019.
The Adani Group had previously said it had won the Yangon International Terminal project last year through a global competitive bid. The investment is $290 million.
Hindenburg Research last week flagged concerns about the use of tax havens and substantial debt, and said that shares in seven Adani listed companies have an 85% downside due to sky-high valuations.