By Isla Binnie
NEW YORK (Reuters) – An advocacy group focused on the impact of debt markets on climate change called on Monday for major bond investors to shun India’s Adani Group, saying a critical report by a short-seller had undermined confidence in the company’s governance.
U.S. firm Hindenburg Research prompted a multi-billion-dollar sell-off in the Indian group’s stocks last week by launching accusations of improper use of offshore tax havens and high debt. Billionaire chairman Gautam Adani, one of the world’s richest people, dismissed these as baseless.
Activist groups participating in a campaign called Toxic Bonds said they had written to money managers, including BlackRock, Allianz and Pimco, to reject new investments or credit arrangements with Adani, and publicly divest their holdings.
Spokespeople for the Adani Group, BlackRock, Allianz and Pimco did not immediately respond to requests for comment.
Green bonds, used to raise funds for specific projects that are seen to benefit the environment, are one of Adani’s sources of financing.
Hindenburg’s findings “undermine any confidence investors could have that proceeds from Adani’s planned green issues this year would be adequately ringfenced,” Nick Haines, campaign manager for SumOfUs, an investor advocacy group signed up to the campaign, wrote in a copy of the letter sent to Reuters.
Adani’s empire includes interests in coal, a major contributor to greenhouse gas emissions. Its Carmichael mine in eastern Australia produces around 10 million tonnes of coal for export every year.
It has said it will invest more than $50 billion in green hydrogen – a carbon-free fuel many hope can reduce emissions from heavy industry. But the letter said the risk was any investment would prop up high-emitting activity.
“The interconnected financial nature of the Adani Group makes it clear that buying debt from any subsidiary of Adani, is by extension supporting Adani’s mining businesses,” Haines said in the letter.
(Reporting by Isla Binnie; editing by Barbara Lewis)