KUALA LUMPUR (Jan 30): Malayan Banking Bhd (Maybank) said its investment in Adani Enterprises’ secondary share offering were “client subscriptions” and, as such, there won’t be any financial impact to the banking group.

“We are aware of the media reports and we do not respond to speculation. However, we would like to clarify that there is no financial impact to Maybank as the subscription to Adani Enterprises were client subscriptions and fully funded by client funds,” it said in an emailed response to questions from The Edge,

“Due to client confidentiality, we are unable to provide details,” it added.

According to sources, Maybank subscribed to the shares on behalf of its client International Holding Co (IHC), an Abu Dhabi-based conglomerate with businesses in utilities, real estate, industry and food, among others.

“Hence, it (the investment) won’t be held in Maybank’s books,” one of the sources told The Edge, dismissing concerns about the investment’s potential impact on Maybank’s balance sheet.

Maybank’s clarification came after various media reported last week that Maybank Securities was allocated a stake in Adani Enterprises’ US$2.5 billion (RM10.6 billion) secondary share offering.

According to a Jan 25 report by Reuters, Maybank Securities was allocated 34.09% of the 18.2 million shares reserved for institutional investors, for 20.4 billion rupees (RM1.06 billion).

Companies belonging to Indian billionaire Gautam Adani, including his flagship Adani Enterprises, fell sharply last Wednesday after short seller Hindenburg Research released a report that accused the Adani conglomerate of “brazen stock manipulation and accounting fraud scheme over the course of decades”, among other things.

The report came out just before the secondary share sale by Adani Enterprises began for retail and institutional investors last Friday (Jan 27). The secondary share sale is reported to be India’s largest.

On Jan 29, the Adani Group put out a lengthy 413-page response to the short seller’s report, in a move to calm investors ahead of the expected completion of the US$2.5 billion share sale early this week. In a nutshell, it claimed the report was baseless and said it was mulling taking action against Hindenburg.

“This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” Adani Group said.

It is noteworthy that Hindenburg has said it has a short position in Adani’s companies through US-traded bonds and non-Indian-traded derivatives.

As at 4.05pm, Adani Enterprises’ share price was trading at 2,767.40 rupees — down 18.3% from 3,388.95 rupees last Wednesday but slightly higher than last Friday’s close of 2,761.45 rupees.

The share price on Monday is below the company’s reported floor price of 3,112 rupees per share and a cap of 3,276 rupees for the secondary share sale.

Adani Enterprises aims to fund capital expenditure and pay off some of its debts from the proceeds of the share sale.