Adani Ports and Special Economic Zones stated that it will write down its investment in the project in an absolute manner. The company declared that it cannot clarify the divestment tendered by KLP Fund as it relies on the latter’s internal policy.
Adani Ports announced the write-down will not substantially affect the balance sheet as it is similar to about 1.3 per cent of the cumulative assets of the company.
Adani Ports and Special Economic Zone Limited once again proved it will abandon its project in Myanmar and write down its investments in an absolute manner in a scenario where the nation is authorised under the United States’ Office of Foreign Assets Control. The explanation to the stock exchange came in the wake of reports of Norwegian pension fund KLP seizing a stake in the company on grounds of its relations with the Myanmar military breach.
On Wednesday, Adani Ports announced in a filing, “The Company is in discussion with its US based counsels to ensure that the Company is in compliance with the OFAC [Office of Foreign Assets Control] sanctions programs. In a scenario wherein Myanmar is classified as a sanctioned country under the OFAC or if OFAC opines that we are in violation of the current sanctions, the company has plans to abandon the project and will write-down its investments in the project in full,”.
The write-down will not substantially affect the balance sheet as it is comparable to about 1.3 per cent of the total assets of the company, Adani Ports specified. The company also restated that it has a zero-tolerance policy which assures that there is no violation of the US and other sanctions.
Questions have been raised by international investors over Adani Ports’ involvement in the project to construct a container terminal in the city of Yangon on land leased from a Myanmar military-owned conglomerate. On February 1, the international community censured the military coup in Myanmar and consequent severe crackdown on mass protests, in which hundreds of people lost their lives. Nations have inflicted penalties on military figures and military-controlled entities in Myanmar.
Adani Ports said that it is inadequate to comment on the divestment made by the KLP Fund “as the Funds decide the investment plans basis their internal policy”. KLP Fund was holding 1.05 lakh equity shares (0.005 percent of paid-up capital) as of March 31, 2021, the company notified.
KLP had recently stated in a statement, “Adani’s operations in Myanmar and its business partnership with that country’s armed forces constitutes an unacceptable risk of contributing to the violation of KLP’s guidelines for responsible investment,”.
KLP said that it was dispossessing because the Yangon container terminal is being constructed on land owned by the Myanmar military and that there is an “imminent danger” the armed forces could utilise the port to import weapons and equipment, or as a naval base.