GQG Partners, one of the biggest backers of Adani Group post the US short-seller Hindenburg Research row, said it is reviewing the need to potentially act on its investments in the group companies after the US authorities indicted founder Gautam Adani in an over $250-million bribery case. GQG Partners’ shares tumbled over 19% in Australia on Thursday and hit their lowest levels in 8 months amid concerns over the exposure to Adani Group.
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While GQG said more than 90% of its client assets are invested in issuers unrelated to the Adani Group, the investment firm’s depository receipts listed in Sydney slumped by a record 19%.
Rajiv Jain, chairman and chief investment officer of GQG Partners, has been a key backer of the Adani Group after a report from US-based short-seller Hindenburg in January 2023 triggered a rout in the conglomerate’s stocks. The boutique investment management company had bought stake in several group companies in the last couple of years. It backed Adani in the months following the short-seller report that wiped out more than $150 billion in market value for the group at one point.
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However, the Adani Group recouped all its losses and surpassed pre-Hindenburg valuations, leading to a sharp surge in GQG Partners’ investments, which are likely valued at more than $10 billion.
The US authorities’ bribery charges led to a nearly 16% decline in Adani Group’s market capitalisation on Thursday, prompting GQG to consider potential necessary actions.
In a statement to the Australian exchanges, GQG Partners said it is monitoring the charges brought by “the US Attorney’s Office for the Eastern District of New York and the US Securities and Exchange Commission against Gautam Adani and certain other Adani Group executives and companies”.
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“Our team is reviewing the emerging details and determining what, if any, actions for our portfolios are appropriate,” it said.
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