The Financial Conduct Authority (FCA) in the UK has launched an investigation against the Adani Group and Elara Capital.
Elara Capital, a London-based company, is reported to have links to the Adani group, and the Indian group itself is being watched by the Financial Conduct Authority (FCA) in the UK.
Although the allegations mostly focus on the group's firms outside the UK, according to sources speaking to Financial News, the FCA is looking into possible UK connections around Elara.
FCA is looking at Elara after former UK Prime Minister Boris Johnson's brother Joe left his board at the company. On 1 February, Joe Johnson announced his resignation as Adani's shares plummeted.
A person familiar with the FCA's reasoning said that Adani Enterprises sells related securities of an Indian listed firm. Livemint could not independently verify the developments.
Raj Bhatt, CEO and Head of Elara, founded the company in 2002 with the primary goal of enhancing funding for Indian corporates. Additional locations for Elara Capital include Singapore, Mauritius, New York, Ahmedabad and Mumbai. On its website, it lists asset management, sales and trading, research and analysis, and investment banking as some of its services.
Following the debacle, Adani Enterprises canceled a $2 billion follow-on public offering (FPO) and retaliated against the Hindenburg claims in an attempt to stem its falling price. The day Adani Group announced the cancellation of the FPO, Johnson announced his resignation from the company.
"I now recognize that this is a role that requires greater domain expertise than I expected in particular areas of financial regulation and accordingly, I have resigned from the Board," Johnson said.
Since the January 24 report, Adani's market value has declined by over $100 billion. Adani has denied all the allegations.
Elara was mentioned in a study by US-based Hindenburg Research, which raised doubts about the financial stability of the Adani Group. The Indian company has denied the short seller's allegations of financial fraud at Adani, but they have caused stock routes across all Adani entities.
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