Credit Suisse Drops Adani Group Bonds Due to Hindenburg Controversy

Credit Suisse Drops Adani Group Bonds Due to Hindenburg Controversy

Credit Suisse, a Swiss investment banking firm, has stopped accepting Adani group bonds as collateral for margin loans to private banking clients, indicating increased scrutiny of Gautam Adani’s finances following fraud allegations by Hindenburg Research.

Credit Suisse’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, according to Bloomberg.

While Credit Suisse has cut lending value to zero, other banks still lend against Adani’s debt, with at least two European private banks maintaining unchanged lending levels for now. One of these banks offers to lend between 75% to 80% for Adani Ports dollar bonds.

Cutting lending value to zero means private banking clients typically need to add cash or another form of collateral, or face potential liquidation of their securities.

The Adani group has been thrown into turmoil following Hindenburg Research’s allegations of overstating revenue and stock prices through a web of firms in tax havens.

The group’s bonds hit record lows after the allegations but have since partially recovered following a $2.5 billion share sale by Adani Enterprises Ltd, backed by existing shareholders and institutional investors.

On Wednesday, Mukesh Ambani, Chairman of Reliance Industries, surpassed Gautam Adani as the richest Indian in the world, with a net worth of $84.3 billion according to Forbes’ real-time billionaire list for 2023.

Ambani’s assets increased by 0.19% with a wealth increase of $164 million, while Adani’s assets decreased by 4.62% with a wealth of $84.1 billion.

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