Indian company Adani Group has been removed from the Dow Jones Sustainability Indices after the firm went into crisis after an escalating stock rout triggered by claims of fraud cut the value of the conglomerate in half.
The crisis was triggered by US-based short-seller Hindenburg Research’s January 24 report that accused the Adani Group of stock manipulation, unsustainable debt and use of tax havens.
The Adani Group, one of India’s top conglomerates, has rejected the criticism and denied wrongdoing in detailed rebuttals, but shares in the listed flagship Adani Enterprises dropped more than 25% shortly after markets opened in Mumbai on Friday, despite attempts by the company to restore investor confidence. Other listed entities, such as Adani Green Energy and Adani Ports, were also down sharply.
The Dow Jones Sustainability World Index consists of global sustainability leaders identified by S&P Global through the Corporate Sustainability Assessment (CSA). It represents the top 10% of the largest 2,500 companies in the S&P Global BMI based on long-term economic, environmental, and social criteria.
The index aims to steer investors toward more sustainable investments with confidence. In 2022, over 7,500 listed companies reported to the evaluation, and only the best in the respective industries qualified for the index.
Adani Enterprises has now been removed from the Dow Jones Sustainability Indices, S&P said in an announcement.
“Adani Enterprises will be removed from the Dow Jones Sustainability Indices following a Media & Stakeholder Analysis triggered by allegations of stock manipulation and accounting fraud,” it said in a one-line notice.
Adani Enterprises was added to the Dow Jones Sustainability Emerging Markets Index last December, according to a list of components on S&P Global’s website.
The indices serve as benchmarks for investors who “integrate sustainability considerations into their portfolios,” according to the S&P Global website. They are designed to serve as an “effective engagement platform for investors who wish to encourage companies to improve their corporate sustainability practices.”
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