Citigroup’s Wealth Unit stops accepting Adani Securities

TNI Bureau: In what can be considered as a jolt to Gautam Adani, American multinational investment bank Citigroup Inc.’s wealth arm has stopped accepting securities of his firms as collateral for margin loans as banks ramp up scrutiny of the Indian tycoon’s finances.

According to reports, the Citigroup’s wealth unit stopped accepting Adani Group’s securities following allegations of fraud by short seller Hindenburg Research.

The US lender’s move to restrict lending comes a day after Switzerland-based global investment bank Credit Suisse Group AG took the same decision as Adani’s beleaguered empire becomes further engulfed in crisis.

“In recent days, we have seen a dramatic price drop of Adani issued securities,” Citigroup said in an internal memo seen by Bloomberg News.

“Stock and bond prices have plummeted following the negative news around the group’s financial health,” said the bank in the memo adding that it has decided to remove lending value “to all Adani issued securities with immediate effect.” Based on its estimates, the impact of this decision to its margin lending portfolio is limited, it said.

A report of on Wednesday revealed that the Credit Suisse Group AG stopped accepting the bonds of Adani Group companies as collateral for margin loans to its private banking clients, assigning a zero lending value for the notes sold by Adani Ports and Special Economic Zone, Adani Green Energy and Adani Electricity.

Adani Enterprisesadani groupCitigroupCitigroup Wealth UnitCredit Suisse