Switzerland-based investment banking company Credit Suisse has stopped accepting bonds of Adani group as collateral for margin loans to its private banking clients, a sign that scrutiny of the billionaire Gautam Adani's finances is growing after allegations of fraud by short-seller Hindenburg Research.
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, Bloomberg agency reported.
Other banks continue to lend against Adani's debt. At least two European private banks kept the level unchanged as of now, with one of those offerings to lend between 75% to 80% for Adani Ports dollar bonds.
When a private bank cuts lending value to zero, clients typically have to top up with cash or another form of collateral and if they fail to do so, their securities can be liquidated.
The Adani group empire has been thrown away into turmoil after Hindenburg Researched alleged in a report that the conglomerate used a web of firms in tax havens to overstate revenue and stock prices.
Since the allegation, the bonds of the group plumbed record lows after the allegations, though they’ve since recouped some losses after Adani Enterprises Ltd. completed a $2.5 billion share sale with support from existing shareholders and institutional investors.
Meanwhile, on Wednesday, Reliance Industries chairman Mukesh Ambani overtook Gautam Adani to become the richest Indian in the world with a net worth of $84.3 billion, according to Forbes Real-time billionaire list for 2023.
Ambani overtook Adani after the Reliance Industries Chairman's assets went up 0.19% with an increase of wealth by $164 million while Gautam Adani's assets went down by 4.62% with the industrialist's wealth pegged at $84.1 billion.
Adani who figured among the top three billionaires in the world has dropped in the ranking to number 10 just below Mukesh Ambani. At the top of the list is French luxury fashion giant LMVH's Bernard Arnault and family.
Credit Suisse stops accepting bonds of Adani’s group amid Hindenburg row | Mint - Mint
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