The Corporate Governance conundrum in emerging markets: A case study of Adani Group – Part 2

Synopsis: The Hindenburg vs. Adani group saga continues. The allegations and counter-allegations fly thick and fast from both sides and at the same time, the slide in the stock prices of Adani group also continues almost unabated. Nevertheless, we believe that this is a classic case of missing forests for the trees. Focusing too much on either the Adani group or what Hindenburg has pointed out, misses the moot point. The issue is much larger and this case should only be seen as a sample of the unique corporate governance characteristics in emerging markets and what the investors can do to navigate these challenges more effectively.

We look at some of the governance-related issues which continue to make emerging market investing a challenge for global investors and how local knowledge can be utilized to mitigate the investment risk associated with weak governance. Decision-making based on local understanding can get a significant boost with the use of multilingual AI technology which helps to measure and assess risk in a more structured and systematic way for thousands of companies on a daily basis.