Adani versus Economic Times: Adani Ports and SEZ files a civil suit

A June 14 report in the newspaper about an Indian government agency freezing the accounts of three of Adani Group’s foreign investors had sent its shares tumbling.

ByTanishka Sodhi
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Adani versus Economic Times: Adani Ports and SEZ files a civil suit
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On June 14, the Economic Times reported that the National Securities Depository Ltd, a government entity which holds securities, had frozen the accounts of three foreign investment funds – Albula, Cresta, APMS – which together own shares of Rs 43,500 crore in four Adani Group companies.

The Adani Group promptly issued a statement denouncing the ET report as “blatantly erroneous” and a deliberate attempt to mislead the investing community.

“This is causing irreparable loss of economic value to investors at large and reputation of the group,” the statement added. The ET carried the Adani Group’s release denying that accounts of its investors had been frozen, but did not retract its initial report. The NSDL also clarified that accounts of the three funds were still “active”.

On August 3, Adani Ports and Special Economic Zone Limited, an Adani Group company, filed a civil defamation suit in an Ahmedabad court against ET editor Bodhisatva Ganguli as well as the journalists who authored the report, Pavan Burugula and Nehal Chaliawala. Curiously, it also mentioned as a respondent John Doe/Ashok Kumar, which means the court’s order will also apply to unknown and unnamed people. The order had not been uploaded on the court’s website till this report was published.

When Newslaundry contacted Burugula and Chaliawala to ask about the suit on Wednesday evening, they claimed it was the first they were hearing of it. The editor declined to comment.

They had, however, been contacted by the Ahmedabad Crime Branch, sources told Newslaundry, and told to furnish proof of their “due diligence” for the report, such as the emails sent to the concerned parties before it was published.

In the meantime, they were served a notice by Adani Ports and Special Economic Zone Ltd to cease and desist from publishing or circulating the story or any unverified information about the company.

After the ET report came out on June 14, Adani Group’s stocks tumbled, losing over $6 billion in value, according to Reuters, as investors feared that the conglomerate’s three foreign shareholders would not be able to trade in the market.

After disputing the ET report, the NSDL had said its freezing of the accounts of Albula, Cresta and APMS was not linked to the Adani Group but to an unrelated 2016 case. The NSDL website, however, continued to show the three funds on the list of investors whose accounts had been frozen, adding to the confusion. It wasn’t until last week that the NSDL clarified the matter.

Newslaundry reached out to Adani Group’s spokespeople to ask about their civil suit against the ET journalists, but they said the company could not comment immediately. They would get back to us, they added. This report will be updated if they do.

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