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

Synopsis: The last few days have been rocky for the third richest person on the planet, Mr. Gautam Adani, the Chairman and majority owner of Adani Group. With a market cap of more than 200 bn USD, before the recent crash which shaved off almost 25% in value, the group has come under immense scrutiny. High-profile investors such as Bill Ackman have also joined the debate.

All of this chaos has risen after a short seller firm Hindenburg Research’s scathing report on Adani Group’s questionable business and governance practices impacted investor sentiment. In this report from EMAlpha in which we have drawn from the experience and insights of people who have tracked the evolution of Adani Group for more than fifteen years now, we don’t necessarily comment on either Hindenburg’s allegations or Adani Group’s response so far.

While Adani Group is a great case study in this sense we, however, have focused the lens on some of the governance-related issues which continue to make emerging market investing a challenge for global investors.

We also hone in on how the local media coverage can be utilized to assess the impact of material developments. Because of the perennial challenge of language in emerging markets, an effective and efficient way of handling the issue is by using a multilingual AI. However, there are also countries where the local news is in English, but still, a local scan using multilingual AI adds immense value because of the nature of coverage on key issues.