Shares of Australian-listed GQG Partners fell by 13% on Monday following a downgrade by UBS, which estimated that the firm may have lost A$600 million ($390 million) in funds under management in just two days after the indictment of Adani Group executives.
GQG Partners is a significant investor in Adani Group companies, whose founder, Gautam Adani, and seven other associates have been indicted by U.S. authorities on bribery charges. The Adani Group has denied the allegations, calling them baseless, and has vowed to pursue all available legal recourse.
UBS downgraded GQG’s rating from “buy” to “neutral” and reduced its price target from A$3.30 to A$2.30. GQG shares were last seen trading at A$2.07. The downgrade was based on a memo sent by GQG to investors, which indicated the potential loss of A$600 million in funds over the two-day period following the indictment.
While UBS analysts expressed confidence that the Adani-related issues would not significantly impact GQG’s investment performance, they highlighted that the firm had already been experiencing weaker fund inflows in November, even before the indictment news broke. The analysts expect slow fund growth for GQG in the near future.
GQG Partners has yet to comment on the downgrade.
Meanwhile, Adani Green Energy, at the center of the controversy, saw its shares rise by as much as 9.4% on Monday, recovering all of its losses since the indictment. U.S. authorities have accused Gautam Adani, his nephew Sagar Adani, and Vneet Jaain, managing director of Adani Green Energy, of participating in a $265 million bribery scheme to secure Indian power supply contracts, as well as misleading U.S. investors during fundraisings.
In response to the charges, Gautam Adani addressed the indictment for the first time in a speech over the weekend, emphasizing that the Adani Group had overcome previous challenges and remains committed to maintaining “world-class regulatory compliance.”
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