Hindenburg rout: S&P’s move to place Adani Transmission’s ESG rating under review comes after allegations of “significant government lapses” at Adani Group companies
In another ripple effect of the Hindenburg Research report row, now global rating agency Standard and Poor’s (S&P) has reportedly placed Adani Transmission’s environmental, social and governance (ESG) evaluation under review. The announcement comes just a couple of hours after MSCI Inc reportedly decided to publish its results of ESG evaluation of Adani Group companies.
According to a report in Business Standard, S&P’s move to place Adani Transmission’s ESG rating under review comes after allegations of “significant government lapses” at Adani Group companies.
“We will closely monitor developments, including any investigations by the Indian regulators and any additional disclosures by the Adani Group....Our current assessment of ATL’s governance factors in some controlling shareholder’s weight in decision making, including on related-party transactions. Common parentage and name-sharing also expose ATL to reputational risks from the wider Adani group,” Business Standard quoted S&P’s official statement as saying.
The report also adds that S&P’s ESG rating review of Adani Transmission comes on the backdrop of a narrative that the allegations related to the Gautam Adani-led group’s governance and disclosures “may affect the appetite of fund providers and business partners in supporting ATL’s growth.”
In addition to this, S&P is reportedly expected to complete its ESG review of Adani Transmission in the coming months. While the agency believes that the allegations may overall raise the financial and operational risks for Adani Group companies, it will also reportedly assess the effects of the allegations on the ESG evaluation.
Before this, media reports also suggested that MSCI Inc. will soon be releasing the results of a quarterly review for its ESG and climate indexes. While the results are expected this week, it must be noted that MSCI has not changed its ratings of Adani Group companies ever since the Hindenburg Research report came out.