S&P to eject Adani Ports from index for Myanmar military ties

S&P Dow Jones Indices says it is removing India’s Adani Ports and Special Economic Zone Ltd from its sustainability index due to the firm’s business ties with Myanmar’s military, which is accused of human rights abuses after a coup this year.

The company, which is building a $290m port in Yangon on land leased from the military-backed Myanmar Economic Corporation (MEC), did not immediately respond to an emailed request for comment by the Reuters news agency.

Adani Group, the ports-to-power plants conglomerate controlled by Indian billionaire Gautam Adani, said late last month it would consult with authorities and stakeholders about the project after human rights groups reported that its ports unit had an agreement to pay millions of dollars in rent to MEC.

The military coup on February 1 and the ensuing crackdown on protests have seen an estimated 700 people killed, drawing international condemnation, including sanctions last month from the United States and United Kingdom against MEC and another military-controlled conglomerate, Myanmar Economic Holdings Public Company Ltd (MEHL).

US Secretary of State Antony Blinken said the sanctions were imposed to promote “accountability for the coup and the abhorrent violence and other abuses”.

Adani Ports will be removed from the index prior to the open this Thursday, S&P Dow Jones Indices said in a statement.

The decision was hailed by activists.

“This shows that there are commercial consequences for Adani Ports and other businesses that continue to disregard their human rights responsibilities by financing the Myanmar military,” said Yadanar Maung, a representative for activist group Justice For Myanmar.

Shares in Adani Ports were down 1 percent in early Tuesday trade. Its shares have in general been little affected by the Myanmar issue, having climbed some 40 percent since February 1.

Bid won

Adani Ports and SEZ Ltd in 2020 won a bid to build and operate Yangon International Terminal, which it said is an independent project fully owned and developed by the company.

The Australian Centre for International Justice and Justice for Myanmar last month released a report citing documents purporting to show that an Adani unit will pay up to $30m in land lease fees for the project to the MEC, one of two military-controlled conglomerates sanctioned by the US last month.

Adani did not comment on the lease payments detailed in the report, but said the land acquisition for its project was facilitated by the Myanmar Investment Commission under the now-overthrown civilian government.

“Much like our global peers, we are watching the situation in Myanmar carefully and will engage with the relevant authorities and stakeholders to seek their advice on the way forward,” an Adani spokesman said in a statement at the time.

The spokesman said the company condemned violations of human rights and was working with independent think tanks to mitigate any human rights risks.

Some international firms have moved to sever or review ties with Myanmar firms linked to the military.

Japanese drinks giant Kirin Holdings in February scrapped its beer alliance with MEHL while sources have said South Korean steelmaker POSCO has begun weighing how it can exit a joint venture with MEHL.