February 2, 2023
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Credit Suisse stops accepting bonds of Adani Group firms.
The move comes amid heightened scrutiny of the conglomerate’s finances after allegations of fraud by US short seller Hindenburg Research. Adani Group stocks crashed after this news emerged.
The Swiss lender’s private banking arm has assigned a zero lending value for notes sold by Adani Ports and Special Economic Zone, Adani Green Energy and Adani Electricity Mumbai Ltd, reported Bloomberg.
It had previously offered a lending value of about 75% for the Adani Ports notes, said Bloomberg citing sources.
However, as of now other banks continue to lend against Adani debt. At least two European private banks kept the level unchanged as of now, with one of those offering lending of between 75% to 80% for Adani Ports dollar bonds, which could trigger a rating downgrade, said the report.
All of the 10 listed Adani Group stocks (including recently acquired ACC, Ambuja Cements and NDTV) fell sharply on Wednesday, after a report claimed that Credit Suisse had stopped accepting bonds of Adani companies as collateral for margin loans to its private banking clients.
The stocks started tumbling after a report by US-based short seller Hindenburg Research alleged that the Indian conglomerate had engaged in stock manipulation and accounting fraud scheme over the last few decades. Adani Group, however, refuted the claim as baseless.
The group accused Hindenburg of not doing proper research and “copy-pasting” from the company disclosures.
