New Delhi:
Well-known global financial services firm Cantor Fitzgerald says that the recent article in the ‘Financial Times’ targeting the Indian business group Adani Group was published only to create noise. Cantor Fitzgerald stressed that it seems as if the financial markets have ignored that article. The report of the financial advisory firm said that the market believes that the article published against the Adani Group is ‘immaterial’.
On Wednesday, the London-based Financial Times, citing a document by the George Soros-backed Organised Crime and Corruption Reporting Project (OCCRP), accused the Adani Group of fraud and selling low-grade coal as high-value fuel to the Tamil Nadu Generation and Distribution Company in 2013.
The steady increase in the market capital of the Adani Group throughout the past year clearly shows that investors have reposed faith in the Adani Group companies despite the allegations. By the way, this is the third time that two foreign media platforms have published negative reports about the Adani Group. The Adani Group has denied all the allegations, and has questioned the timing of the publication of the recent report, when general elections are going on in India.
The ‘Financial Times’ had published an article on the Adani Group, alleging that in the year 2013, the group had imported low-quality coal and then sold the same coal to government-owned companies at the price of high-grade coal.
When Cantor Fitzgerald contacted the Adani Group, the group said that this particular purchase order for the Tamil Nadu company was a fixed-price contract, which the company had secured through an open, competitive and global bidding process. According to Cantor, the Adani Group was bound to supply coal to the Tamil Nadu company at a pre-determined price under the contract.
Kanter claimed that it was told by the group that the quality of coal was tested by the buyer and not by the supplier Adani Group. He said, “Payments are made based on the results of these tests… Thus, the claim that Adani Group could buy coal with low GCV and sell it as high GCV coal does not seem credible, because the test was done by the buyer, and the payment was based on the test itself…”
Interestingly, according to Kanter’s report, the Financial Times article was based on a report by Customs and Directorate of Revenue Intelligence (DRI). Kanter said, “It is worth noting that during the said period (2012-2014) DRI and Customs had accused all coal importers of under-declaring coal quality… and this was why DRI and Customs were demanding additional customs duty… So, the fact that this report (Financial Times article) argues against what DRI and Customs said at that time is also questionable in our view…”
Moreover, Kantor believes that India is one of the fastest growing economies, and is investing heavily everywhere, so this is a good sign for Adani Enterprises.
(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)
