The deepening crisis of Adani Group stock value erosion has affected a number of Australian retirement savings. According to a report in the Guardian, several Australian retirement funds had actively invested in the Gautam Adani-controlled companies, including those that cater to government workers in Queensland and employees at the Commonwealth Bank.
The Adani Group stocks have been under fire for the last four weeks after US short seller Hindenburg Research released a report on Adani Group accusing it of “brazen accounting fraud, stock manipulation, and money laundering”. Since January 24 this year, the Adani Group stocks have collectively lost a whopping $134 billion in market value.
The group’s market capitalisation (m-cap) has slipped below the $100 billion mark as a selloff intensified in a majority of the conglomerate’s listed stocks. In less than a month, Adani stocks have lost 60% of their value.
The Guardian report said that a number of superannuation funds had actively invested in Adani group companies after allocating money to emerging markets to boost returns.
Australia’s $243-billion Future Fund, which was set up to strengthen the commonwealth’s long-term financial position, has invested in two Adani companies that are now worth a fraction of the original investment.
Similarly, Brisbane-headquartered Australian Retirement Trust, with more than $200 billion in assets, had invested million of dollars in at least six Adani entities before the report was released.
The investment was part of a “passive” allocation, whereby the fund appointed external fund managers to invest on its behalf in a particular country or sector, often tracking an index, the Guardian report said.
The fund offers superannuation products to Queensland government employees and their families as part of its service.
The Adani-controlled conglomerate owns several companies with interests ranging from energy to transportation across the globe, including in Australia, where it operates the Carmichael coal mine and the Abbot Point port, which was renamed North Queensland Export Terminal.
Speaking to the Guardian, Will van de Pol, a Market Forces asset management campaigner, said: “Any super fund investing in Adani Group companies has failed its members on climate action and due diligence.”
He added: “These funds have used members’ money to prop up Adani’s unacceptable coal expansion plans, including the disastrous Carmichael mine, and failed to see glaring investment risks that existed for years before being outlined in the Hindenburg report.”
The Guardian report highlighted that climate activists have said that the superannuation holdings are collectively worth tens of millions of dollars, but only represent a small fraction of an individual fund due to the diversified nature of their stock holdings.
“These funds have used members’ money to prop up Adani’s unacceptable coal expansion plans, including the disastrous Carmichael mine, and failed to see glaring investment risks that existed for years before being outlined in the Hindenburg report,” Van de Pol told Guardian.
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Like Australia, Norway’s sovereign wealth fund had a sizeable holding in Adani Group stocks, but sold most of its Adani stakes before the share collapse.
The $70-billion Hesta fund, primarily catering for health and community service workers, had one of the larger exposures to Adani group stocks among Australian funds in recent years, the Guardian report said.
The Adani Group has categorically denied Hindenburg’s allegations and labelled them as being “malicious”, “baseless” and a “calculated attack on India.”
Watch: Gautam Adani slips to 25th spot on global rich list; loses $50 billion in net worth
Under fire from different quarters due to the Hindenburg report, the Adani Group has been trying to soothe investor nerves by prepaying loans and focusing on cash conservation.
The group has claimed that the companies have enough cash reserves to pay debt obligations and there is no immediate major debt maturity in the near and medium term that poses refinancing risk.
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