Global rating agency Standard & Poor’s (S&P) has reviewed Adani Transmission Ltd’s (ATL) environmental, social and governance (ESG) evaluation. This follows recent allegations of major governance failures at the Adani group of companies.

On January 24, 2023, short seller Hindenburg’s report claimed that the Adani Group had major governance issues. Many of the allegations relate to disclosures and actions at the shareholder level. Since then, shares and bonds of the group’s entities, including ATL, have plummeted.

“We will closely monitor developments, including any investigations by Indian regulators and any additional disclosures from Adani Group,” S&P said in a statement.

The rating agency said allegations related to group governance and disclosure could affect the willingness of fund providers and business partners to support ATL’s growth. This could increase the company’s financial and operational risks.

“Our current assessment of ATL’s governance factors weighs in the decision-making weight of some controlling shareholders, including in related party transactions. Common origin and name-sharing also expose ATL to reputational risks from the wider Adani group,” it added.

The rating agencies aim to complete their review of ESG evaluation in the coming months. It will assess the impact of allegations on ESG evaluation.

The rating agency previously gave Adani Transmissions an ESG score of 63. The score is derived by weighing the group’s environmental, social and governance profile and comparing it against an overall score of 100.

ATL is India’s largest private transmission and distribution company. The Adani family reportedly controls 75% of the company, with the rest floating freely. ATL operates 18,795 circuit km of transmission lines in FY2023.

The company’s total transformation capacity is 40,001 MVA. It has a 500 MW coal-fired power plant.