LIC reviews Adani’s response to short seller’s allegation

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Life Insurance Corporation (LIC) said on Monday it was reviewing the Adani Group’s response to scathing criticism from a US short seller and would speak to the group’s management in a few days.

Shares of the group’s companies, headed by Asia’s richest person, Gautam Adani, have lost an estimated 5,37,911 crore rupees ($66 billion) since Hindenburg Research raised concerns early in the last week regarding corporate debt levels and the use of tax havens. Adani says he complies with all local laws and has made the necessary regulatory disclosures.

Read also | Adani Group CFO Says Shares Baffle Like Jallianwala Bagh Massacre

“Currently there is a situation emerging and we don’t know what the factual position is…Since we are a large investor, we have the right to ask relevant questions and we will certainly engage with them,” said the Managing Director of LIC, Raj Kumar. Reuters.

State-owned LIC, the country’s largest insurer, says it has invested 36,430 crore rupees ($4.47 billion) in Adani companies, about 1% of its assets under management.

“Of course, we are studying the 413-page response given by Adani Group,” Kumar said. “We will also see if the concerns are resolved – if we believe the concerns are not resolved, we will seek further clarification from them.”

LIC held a 4.23% stake in Adani Flagship Enterprises at the end of December, over 9% in Adani Ports and Special Economic Zone, nearly 6% in Adani Total Gas and 3.65% in Adani Transmission, according to data from the Bombay Stock Exchange.

Kumar’s comments came after Adani said in a statement on Sunday evening that its “strategic and long-term investors have placed complete faith and confidence in the group”.

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