International Holding Company, a conglomerate based in Abu Dhabi, is selling its stakes in two companies owned by Indian tycoon Gautam Adani. This will be a major blow to this business empire that has been accused of accounting fraud.
IHC announced that in April 2022 it would invest about $500mn in each of the renewables arm Adani Green Energy, power company Adani Transmission and Adani Enterprises. It will also invest $1bn into Adani Enterprises.
Sagar Adani, executive director of Adani Green and IHC, praised the decision as “the beginning of a larger relationship between the Adani Group”
The conglomerate is headed by Sheikh Tahnoon Bin Zayed al Nahyan. He is one of the most powerful men in the United Arab Emirates. On Thursday, it announced that they had found a purchaser for their Adani Green and Transmission shares.
Adani’s investments in IHC have been reduced by 50% after just 18 months.
IHC stated that the Adani dispositions were part its “overall strategy of portfolio rebalancing” and it was currently completing the regulatory paperwork for the transaction with an unnamed buyer. The filing did not mention its stake in Adani Enterprises.
Eight months ago, US short seller Hindenburg Research had accused Adani Group’s ports to Power of accounting fraud and stock-market manipulation. Adani strongly denies the allegations.
The report sparked a sell-off which at one point knocked 150bn off of the combined stock value of Adani’s 10 listed companies. Shares in the group have recovered some of the losses.
IHC didn’t disclose the price it sold its stakes at, but shares of Adani Transmission and Adani Green trade at a price that is far below what the conglomerate paid to buy into the companies. This suggests significant losses for both investments.
According to the latest filings at the Indian stock exchange IHC owns 1.3 percent of Adani Green, and 1.4 percent of Adani Transmission. This year, Adani Energy Solutions was renamed Adani Transmission. TotalEnergies, a French oil giant, owns a 20% stake in Adani Green.
IHC didn’t immediately respond to an inquiry for comment. Adani declined comment.