Adani group

Adani Group said today said that its engagement with financial institutions over a petrochemical project at Mundra in the Gujarat was still ongoing. The company clarified after Press Trust of India reported on Sunday that the embattled group had suspended work on the Rs 34,900 crore Green PVC project after the Hindenburg short seller report.

“The financial closure of the Green PVC project of M/S Mundra Petrochemicals Limited ( MPL) is pending with the financial institutions and it is in their active consideration. Due to recent market developments, the management has decided to continue with the Engineering design and other activities including financial closure in an accelerated mode,” the Adani group in a communication to exchanges.

Pending financial closure, “it has been decided to keep the major equipment procurement and site construction activities on hold,” the conglomerate said. The Adani group also said that it is hopeful of obtaining financial closure for the project in next six months post which full-fledged procurement and construction activities at site will commence.

“We are committed to completing the project in an expeditious manner so as to meet the original timelines,” it said.

Citing sources, the Press Trust of India report had said that the Adani group “has decided not to pursue for the time being is the 1 million tonnes per annum Green PVC project. The group has shot off emails to vendors and suppliers to suspend all activities on immediate basis.”

The unit was to have a poly-vinyl-chloride (PVC) production capacity of 2,000 KTPA (kilo tonne per annum) requiring 3.1 million tonnes per annum (MTPA) of coal that was to be imported from Australia, Russia and other countries. PVC is the world’s third-most widely produced synthetic polymer of plastic. It finds wide applications – from flooring, to making sewage pipes and other pipe applications, in insulation on electrical wires, packaging and manufacture of aprons etc.

As part of the new corporate strategy after the Hindenburg report, the group has cancelled a Rs 7,000 crore coal plant purchase as well as shelved plans to bid for stake in power trader PTC to conserve expenses. It has repaid some debt and pre-paid some of the finances raised by pledging promoter stake in group companies. (With Agency Inputs)

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The Congress on Monday alleged that the Union Ministry of Power and Gujarat Pollution Control Board did not take action against the Adani group for environmental violations The opposition party also claimed the Central Electricity Regulatory Commission (CERC) ignored violations of longstanding power-purchase agreements by the Adani group under the Electricity Act.

The Adani group has rejected all the allegations against it and has claimed that it has not indulged in any wrongdoing.

Congress general secretary Jairam Ramesh posed a set of three questions to the prime minister on the Adani group as part of what the opposition party calls the “Hum Adani ke Hain Kaun” series,

He has so far asked 99 questions and said these can only be answered by a Joint Parliamentary Committee probe.

“Here is HAHK(Hum Adanike Hain Kaun)-33. Our questions directly to the PM on the Adani ‘Maha Mega Scam’. With this, we have reached 99. But we won’t stop, tomorrow we will hit the century mark. These questions can only be unravelled through a JPC .

“Chuppi Todiye Pradhan Mantriji (Break your silence, Mr prime minister),” he said on Twitter.

Ramesh claimed a CAG report tabled in the Gujarat Vidhan Sabha on September 22, 2022 found that the state government had turned a blind eye to environmental violations by the Adani Group.

” Adani Power had illegally dumped 15.42 lakh tonnes of toxic fly ash in low-lying areas between 2014-15 and 2018-19 without the approval of the Gujarat Pollution Control Board (GPCB). It had wrongly reported the recycling of this toxic byproduct even though it had no online monitoring system to ensure it, as required by the Union Ministry of Power,” Ramesh alleged.

He pointed out that the CAG reported that “GPCB did not take any action against APL for dumping the fly ash as in the low-lying areas without its approval and for incorrect reporting of 100 percent utilisation of fly ash”.

“Is your concern for your favourite group’s profits so much greater than for the Gujarati villagers and fishermen whose health and livelihoods have been damaged by rampant fly-ash pollution,” Ramesh said.

The Congress leader also alleged that Adani Power has been defaulting on its power supply obligations to Haryana since December 2020.

“It now transpires that not only is Haryana not receiving the electricity it is due from Adani Power in Mundra, but electricity from Haryana has been illegally diverted to Mundra for onward supply to consumers in Gujarat,” he alleged.

The All India Power Engineers’ Federation has shown that 1,790.25 million units of electricity power flowed in the reverse direction on the Mundra-Mohindergarh high-voltage direct current line between April and December 2022, he claimed.

“Is it true that Haryana paid for the electricity supplied to Gujarat?” the Congress leader asked.

He also claimed that a July 9, 2018 report by the Comptroller and Auditor General (CAG) of India found that the Adani Group had been the major beneficiary of “flawed” coal import tenders issued by the Tamil Nadu Electricity Generation and Distribution Corporation (TANGEDCO) between July 2012 and February 2016.

“Your personal influence over the then AIADMK-run state government is no secret. Did you play any role in helping your cronies make yet another illicit gain, this time at the expense of Tamil Nadu taxpayers,” Ramesh asked.

The Congress has been raising the Adani issue and demanding a JPC after the Hindenburg report levelled several allegations against the business group.

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Last month when Credit Suisse refused to accept Adani bonds in the wake of the Hindenburg report, little did anyone know that in the next few weeks the global investment banker will also suffer a stock crash worse than that of the Indian conglomerate.

In the last 8 trading sessions, Credit Suisse stock has lost over 74%. After the embattled bank was sold to rival UBS Group in a government-brokered rescue deal at a valuation of just $3.25 billion, the stock crashed over 63% to hit a low of SFr 0.68 on the exchange today. UBS’s deal values the stock at 0.76 a share.

On the other hand, since the release of the Hindenburg report on January 25 Adani Group stocks have lost around 52% of their combined market value. In less than two months, Adani stocks have lost around Rs 10 lakh crore of its market value.

Credit Suisse stock is now trading at an all-time low level and has dropped more than 99% from its peak in 2007.

Under the terms of the merger agreement, all shareholders of Credit Suisse will receive 1 share in UBS for 22.48 shares in Credit Suisse. The trouble at the bank, which was brewing for the last two years, came at the forefront after Credit Suisse’s 2022 annual report identified “material weaknesses” in internal controls over financial reporting.

As depositors started withdrawing funds from the banking giant, the stock crash deepened prompting a rescue act by the government and regulators.

Swiss regulator FINMA said it has been monitoring Credit Suisse intensively for several months. “During this time, the bank has taken a number of measures to stabilise the situation. These were not enough to restore confidence in the bank, however, and more far-reaching options were also examined,” it said, adding that the crisis of confidence in e Credit Suisse Group was intensified by the upheavals in the US banking market in March 2023.

“There was a risk of the bank becoming illiquid, even if it remained solvent, and it was necessary for the authorities to take action in order to prevent serious damage to the Swiss and international financial markets,” FINMA said.

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The Supreme Court on Monday declined to stay the National Company Law Appellate Tribunal’s ( NCLAT ) order to hold a second round of auction for RCap assets.

A bench comprising Justices Sanjiv Khanna M.M. Sundresh declined to entertain Torrent’s contention seeking stay on the NCLAT order and issued notice on its plea and fixed the matter for further hearing in August. The apex court came on the plea filed by the Torrent group , a bidder of bankrupt firm Reliance Capital (RCap), challenging the NCLAT.

Senior advocate Mukul Rohatgi, representing Torrent Investments Private Limited, vehemently argued before the bench, could there be a bid every month? The bench said it will examine the matter.

Rohatgi said in the first round, two parties made a bid and it was a structured bid and it was told to his client that their bid was final. He further argued during the bidding the other party stopped and his client went higher and was asked to come forward, but “overnight the man has a different idea and he wants to restart”. The second-round auction, which was scheduled Monday, did not take place.

Rohatgi said, “If there is no stay, today was the deadline…if they start a second bid then if I don’t participate and that bid is final then they will say you are out. If I participate in that bid then this is infructuous…why should it not await two weeks and your lordships may decide. How can somebody get another bite at the same cherry… ”

Rohatgi further added that the resolution professional (RP) told his client that their bid is final and sought the plan, and they have given it. After hearing submissions, the bench said, “Issue notice returnable in the month of August. In the meanwhile, the parties will participate in the process in terms of the impugned judgment, without prejudice to rights and contentions…reply, if any, may be filed in six weeks…”

Earlier this month, the NCLAT order came on a petition filed by Vistra ITCL (India), which is one of the lenders of Reliance Capital, against NCLT order restricting further auction of the bankrupt firm.

Following the NCLAT order, the lenders’ of RCap had decided to hold the second round of e-auction on March 20.

Torrent, after the first auction, was the highest bidder with a bid of Rs 8,640 crore for Reliance Capital. The CoC of Reliance Capital, opted for a second auction after Hinduja group made an offer of Rs 9,000 crore. Torrent challenged this before the Mumbai bench of NCLT (National Company Law Tribunal).

In February, NCLT held that the challenge mechanism for financial bids was concluded as on December 21, 2022, with the bid of Torrent Investments at Rs 8,640 crore being the highest. This order was challenged by the CoC of RCap in NCLAT.

Vistra ITCL (India), one of the lenders of Reliance Capital, had moved NCLAT challenging an order of NCLT which restricted further auction of the bankrupt firm.

RCap was sent for debt resolution in November 2021 after the company defaulted on loans worth Rs 24,000 crore.

The apex court has allowed the lenders to proceed with the second round of the action to maximize value. The Committee of Creditors (CoC) had decided to conduct a second round of auction, post Hinduja bid.

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