The recent scandal involving the Indian mining megacorporation Adani Group has caused a stir, not just in the financial markets, but also in Australia’s retirement savings industry.
Tens of millions of Australian dollars are at risk, as the company’s stock has taken a hit due to fraudulent practices. This has had a ripple effect on the major superannuation funds, such as those belonging to government workers, Commonwealth Bank employees, and other Australians with retirement savings.
Adani Group has been in the news lately for alleged corruption and bribery in India. The company’s stock plummeted in response to the news, which has had a direct impact on the retirement savings of Australians.
For example, the Commonwealth Bank Superannuation Fund, which provides retirement savings for over 500,000 Australians, has seen its investments in Adani drop by millions of dollars.
Several major superannuation funds, such as those providing for government workers in Queensland and employees at the Commonwealth Bank (CBA), were looking to achieve higher returns by investing in emerging markets; however, it seems they have taken on more than they can handle with Adani – and are now feeling the consequences.
The Future Fund, which was intended to strengthen Australia’s long-term fiscal position and contains approximately $243 billion, has invested in two Adani firms, but the current value of these investments is only a small fraction of their original value.
Although the Hindenburg report, which shed light on Adani’s dubious dealings, had been released for years prior to these investments, Market Forces discovered that the ramifications of Adani Group’s issues on these super funds were restricted, but still significant.
Since 24 January, Adani Group – the conglomerate running Australia’s contentious Carmichael coalmine and rail project in Queensland – has been subject to intense selling after US investor Hindenburg Research alleged stock manipulation and accounting fraud.
Since the release of the report, Adani Group’s shares in seven of its listed companies have decreased by an estimated US$125 billion (A$182 billion), which amounts to more than half of the conglomerate’s total value, significantly impacting its worth.
