Adani Ports and Special Economic Zone share price fell more than 2 percent intraday on June 23 after Norway's largest pension fund KLP divested from the company's Myanmar project.
Norwegian pension fund KLP is divesting from Adani Ports and Special Economic Zone on the grounds the company's links with the Myanmar military breach the fund's responsible investment policy, KLP said on Tuesday.
Adani Ports, India's largest port operator, has been under scrutiny from international investors over its project to build a container terminal in the city of Yangon on land leased from a Myanmar military-owned conglomerate.
A military coup in Myanmar on Feb. 1 and an ensuing crackdown on mass protests in which hundreds have been killed has drawn international condemnation and sanctions on military figures and military-controlled entities.
"Adani's operations in Myanmar and its business partnership with that country's armed forces constitutes an unacceptable risk of contributing to the violation of KLP's guidelines for responsible investment," KLP said in a statement to Reuters.
KLP, Norway's largest pension fund, had an investment worth nine million crowns ($1.05 million) in Adani Ports at the time of its decision, it told Reuters.
It was divesting because the container terminal is being built on land owned by the Myanmar military and that there is an "imminent danger" the armed forces could use the port to import weapons and equipment, or as a naval base.
"In this way, the port could be used by the army to continue its violations of human rights," KLP said.
Adani said it condemned the violence in Myanmar and the violations of the fundamental rights of its people and that, at the time the deal was concluded in 2019, its counterparties were entities of the democratically-elected government.
It reiterated it could abandon the project and write down the investment if it is found to be in violation of sanctions imposed by the United States.
"The write down will not materially affect the balance sheet as it is equivalent to about 1.3% of...total assets," it said in a statement to Reuters.
At 10:11 hrs, Adani Ports and Special Economic Zone was quoting at Rs 725.30, down Rs 17.25, or 2.32 percent on the BSE.
With inputs from Reuters
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