Secret paper trail reveals hidden Adani investors

This is an audio transcript of the FT News Briefing podcast episode: ‘Secret paper trail reveals hidden Adani investors’

Marc Filippino
Good morning from the Financial Times. Today is Monday, September 4th, and this is your FT News Briefing.

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Looks like all those interest rate rises are starting to pay off because global growth might dip next year. Moms are returning to the workforce at levels not seen in decades. And the Hollywood strikes are doing major damage to California’s economy. Plus, new documents have uncovered potentially controversial shareholders in India’s Adani Group.

Dan McCrum
It raises the question: were these people acting as frontmen for the Adanis? And if they were acting as frontmen, that raises potential questions about: was market manipulation happening? 

Marc Filippino
I’m Marc Filippino, and here’s the news you need to start your day.

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When it comes to the global economy, it’s sort of a mixed bag. First, let’s go through the good stuff. Global growth has exceeded the expectations that a lot of economists have this year. That’s thanks to strong labour markets and consumer demand, mostly in the US. But new forecasts find that growth is expected to slow next year, or economists predict that high demand will keep inflation elevated for longer. That means interest rates will probably need to stay up there too. Growth in the US might only reach 0.6 per cent next year. Meanwhile, you’re probably not going to see anyone writing home about the UK and the eurozone. And China hasn’t seen the last of its manufacturing and export problems.

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Investors sold off shares in Indian industrial conglomerate Adani after the FT published an investigation into the company last week. That story revealed two of the largest shareholders who were linked to the Adani family. The FT’s Dan McCrum reported that story and he joins me now. Hey, Dan.

Dan McCrum
Good morning.

Marc Filippino
So Dan, in a nutshell, what did your investigation find?

Dan McCrum
What we uncovered was the identity of two of Adani’s largest shareholders. They’ve been hidden behind layers of shell companies, and they turn out to be linked to the Adani family. They were associates of one of the brothers of the founder. And that has a lot of implications because it raises the question: were these people acting as frontmen for the Adanis? And if they were acting as frontmen, that raises potential questions about: was market manipulation happening? Were they breaking Indian rules on things like the minimum amount of shares that are supposed to be owned by the public? We also revealed that the stock market regulator in India suspected market manipulation all the way back in 2014. Then Narendra Modi, the Indian prime minister, was elected and he is widely regarded as being very close to Gautam Adani, founder of this large business. And so it seems that the investigation into Adani went away on his government’s watch.

Marc Filippino
Now, Dan, we should say that Adani said it categorically rejected your findings and said that all of its entities are in compliance with the law. And all of this actually stemmed from earlier this year when the research firm Hindenburg shorted Adani stock and published a report accusing the Adani group of fraud. Adani has also denied those allegations. How does your reporting here compared to Hindenburg’s report?

Dan McCrum
Hindenburg assembled a lot of circumstantial evidence and previous reporting to make its broad brush allegation that a lot of Adani’s public investors weren’t really real public investors at all. They were controlled by a network of associates of a member of the Adani family. And what we do with our reporting is say, well, as it turns out, two of these very large investors do seem to be associates of Vinod Adani. So it does certainly fit the picture. There were 13 different international funds which were identified by regulators as suspicious, and now we’ve identified two of the 13. And it does raise some very serious questions and also begs a further one: what is going on inside these other 11 entities that the regulator also regarded as suspicious.

Marc Filippino
Now, Dan, what are you going to be looking out for in this story in the coming weeks, in the coming months?

Dan McCrum
The big things to watch out for are what do the international investors and the banks do? Adani has raised a lot of money using a lot of big banks. It has recently just raised some quite large investment. And so this is a question both in the confidence of the markets, but also confidence in the Indian financial system of regulation. And I think we are going to see a lot of attention paid on how they continue to deal with the situation.

Marc Filippino
Dan McCrum is an investigative reporter for the FT. Thanks so much for your time, Dan.

Dan McCrum
Thanks for having me on.

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Marc Filippino
It’s Labor Day here in the United States. And one of the biggest worker stories in the country is the one coming out of Hollywood.

Unnamed speaker
How’s everybody feeling today? (Protesters cheering)

Marc Filippino
Writers and actors have been on strike for months now, shutting down most productions. (Protesters chanting) It’s all starting to eat into California’s economy to the tune of about $5bn and counting. About 700,000 Californians work in the entertainment industry, along with the dry cleaners, the drivers, rental companies and small enterprises that support it. And there’s no end in sight. Union reps and studios still don’t see eye to eye. People are worried that the strikes could go on into the autumn.

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American moms are going back to work in droves. Over the past few months, there have been more mothers in the workforce than at any time since 1948, which is when the Labor Department began keeping track. Here to talk more about this is the FT’s US labour and equality correspondent, Taylor Nicole Rogers. Hi, Taylor.

Taylor Nicole Rogers
Hey, it’s great to be back.

Marc Filippino
So I guess this story really starts back in 2020 at the beginning of the Covid pandemic, because at that time women were quitting their jobs and being laid off at a higher rate than men were. Why did that happen?

Taylor Nicole Rogers
I think a lot of that is because of how women are distributed throughout the labour force. If you think about the types of businesses that were shut down in March 2020, it’s the types of businesses where the employees are disproportionately women. You know, restaurants, hotels, that sorts of things. And then as the pandemic progressed, the concern became while schools are shut down, senior care facilities are really complicated right now. Maybe these women aren’t ever going to go back. Even when these businesses reopen because they’re going to be stuck at home caregiving.

Marc Filippino
Now, fast forward to today, and you know, Covid is way less of a presence than it was three years ago. So, Taylor, what are moms telling you now?

Taylor Nicole Rogers
I was really expecting moms to tell me that there were so many new opportunities out there. The labour market is really good for workers now. There are flexible work options if you do have those caregiving responsibilities. But everyone I spoke to said, “Life is just really expensive right now and I can’t afford to stay home.” Women with children are actually returning to work much faster than women without children. If you have that financial responsibility of having to take care of a child, it seems like there’s something about that responsibility that is making you more desperate or more interested in working.

Marc Filippino
So Taylor, the labour market has changed a lot since 2020. Are things any better for women now?

Taylor Nicole Rogers
It depends on what you mean by better. So on one level, there are a lot of jobs available right now. Things are starting to slow down, but you probably can get a higher paying job than you could have three years ago. But on the other hand, I’ve heard from the people that I interviewed that a lot of the old problems are still there. There still are not a lot of accommodations around parental leave, around breastfeeding and around flexible work. So there definitely has been some sort of seismic change in the labour market that has made things perfect for women.

Marc Filippino
Taylor Nicole Rogers is the FT’s US labour and equality correspondent. Thanks, Taylor.

Taylor Nicole Rogers
Thanks for having me.

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Marc Filippino
You could read more on all of these stories at FT.com for free when you click the links in our show notes. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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