Barclays, which has been the go-to bank for Gautam Adani for nearly a decade, is unsure regarding the Group’s prospects and is assessing its stance after the US indictment
Japan’s banks, including Mizuho Financial Group, Sumitomo Mitsui Financial Group Inc., and Mitsubishi UFJ Financial Group, believe the recent storm around the Adani Group following the charges of bribery by US prosecutors will not have a long-lasting impact. Despite the reexamination of the conglomerate by other global firms like Barclays, Japanese banks plan extend to support to the Adani Group chairman, Gautam Adani, Bloomberg reported, citing sources.
This might offer a respite to the Adani Group, which has come national and international scrutiny post US indictment. The Group hasn’t just suffered severe backlash from the opposition in India but has seen a setback as some of its major projects in countries like Bangladesh, Sri Lanka and Kenya have come under scrutiny.
“Drawing from their experiences in Southeast Asia in the ‘90s, Japanese banks have developed sophisticated frameworks for evaluating emerging-market risks,” Ben Charoenwong told Bloomberg, while highlighting lenders’ risk tolerance after the Asian Financial Crisis. Charoenwong is an assistant finance professor at Insead in Singapore. Banks may make the processes or increase risk premiums for some deals, but largely they view India as a crucial growth market and are unlikely to substantially reduce their overall India exposure, he added.
However, UK bank Barclays, which has been the go-to bank for Gautam Adani for nearly a decade, is unsure regarding the Group’s prospects and is reassessing its stance after the US indictment. In fact, Barclays is one of the first international lenders to establish ties to Adani in India. Reportedly, the bank has suspended financing new loans to the group. Barclays move to pull back isn’t just a result of the US indictment, the decrease in direct lending and bond underwriting has seen a slowdown since the American short seller released its report in January 2023 accusing the group of stock manipulation and financial misconduct.