Billionaire Gautam Adani’s port unit has failed to win security clearances needed to expand operations because it is being investigated by the Indian government for possible money laundering, according to three people familiar with the matter. The stock slumped, Bloomberg reported.
The Ministry of Home Affairs has for more than a year been probing Adani Ports & Special Economic Zone Ltd. (ADSEZ) and the source of money transferred to the company from Mauritius, said two government officials. All three people declined to be identified as they aren’t authorized to release the information.
The investigation has derailed or disrupted the Ahmedabad, India-based company’s bids to operate at least three port projects, the people said. That has hindered the Adani Group’s push to boost port capacity about fourfold by 2020 as it imports coal from Australia and Indonesia for its power stations.
The Adani Group didn’t comment on the investigation after repeated phone calls and e-mails. It said in a statement that it won government approval last month to develop a bulk-cargo terminal in Kandla on the west coast, and that it’s begun building an import terminal in the eastern port of Visakhapatnam.
The port operator slumped as much as 11 percent in Mumbai trading. It was down 6.4 percent at 135.95 rupees as of 2:41 p.m. Parent Adani Enterprises Ltd. (ADE) fell as much as 5.05 percent.