Nordic fund KLP divests from Adani Ports over links to Myanmar military

5 mins read  Sealuminati Team June 28, 2021

Adani Ports and Special Economic Zone (APSEZ) said in an after-market report on Wednesday, June 23, 2021, that it may abandon Myanmar project if it violates US sanctions and write off all of its investments.

On property leased from a Myanmar military-owned company, It plans to establish a container terminal in the city of Yangon.

On June 22, 2021, the Norwegian pension fund KLP announced that it was divesting from APSEZ, citing the company's ties to the Myanmar military as a violation of the fund's responsible investing policy.

International censure and sanctions have been imposed on military individuals and military-controlled companies following a military coup in Myanmar on 1 February 2021 and a subsequent crackdown on major protests that resulted in the deaths of hundreds of people.

Adani Ports, in response to the aforementioned media allegations, stated that the firm has a "zero tolerance" approach to guarantee that the US and other sanctions are not violated.

The corporation is discussing the implementation of the OFAC sanctions programme with its U.S. counsel.

"In a situation in which Myanmar is categorized as a country subject to OFAC sanctions or where OFAC feels that we violate the existing restrictions, the company plans to give up the project and to write off its investment in the Project in its entirety". The depreciation will not influence the balance sheet much, since it is comparable to around 1.3% of total assets.

APSEZ achieved a 285 per cent net profit growth in Q4 FY21 to Rs1287.80 crore on a consolidated basis, an increase in total revenues over Q4 FY20 of Rs 4072.42 crore of 21.1%.

As of March 31, 2021, KLP Fund had 1.05 lakh shares (0,005% of paid-up capital). Adani Ports said, "We can't comment on the divestiture of the KLP Fund as the Funds decide their internal policies on the investment plans."

At Rs 715.15 on BSE, it now accounts for 0.49% of the asset.

Adani port clarified the media accusations claiming that KLP from the Nordic fund had retired from its business via contacts to the military in Myanmar.

Adani Ports guarantees that the USA and other penalties do not contravene Q4 FY21 and also in the FY21 integrated annual report.

Concluded Adani Ports by noting, "There is no information that has to be disclosed at this point however, in line with the SEBI Regulations, 2015 and other applicable legislation, the Company shall make publicly suitable public disclosures as and when such occurrence is revealable". There has been a mistake.