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Lord Jo Johnson, younger brother of former British prime minister Boris Johnson, has resigned his non-executive directorship of a UK-based investment firm linked with the now-withdrawn Adani Enterprises Follow-on Public Offer (FPO).
'The Financial Times' newspaper referenced UK Companies House records to reveal that 51-year-old Lord Johnson had been appointed as a director of London-based Elara Capital Plc in June last year and resigned on Wednesday, the day when the Adani Group announced withdrawal of the FPO.
Elara, which described itself as a capital markets business raising funds for Indian corporates, was among the bookrunners on the FPO.
Johnson insisted he has been assured of the company's "good standing" and has stepped down due to his own lack of "domain expertise".
"I joined the board of Elara Capital, an India-focused investment firm based in London, as an independent non-executive director last June in the hope of making a contribution to UK-India trade and investment ties, which I have long supported and co-written a book about,” Jo Johnson said in a statement after news of his resignation was announced by the newspaper.
"I have consistently received assurances from Elara Capital that it is compliant with its legal obligations and in good standing with regulatory bodies.
"At the same time, I now recognise that this is a role that requires greater domain expertise in specialised areas of financial regulation than I anticipated and, accordingly, I have resigned from the board," said Johnson, a House of Lords peer.
According to the newspaper, it is Elara's asset management business that is under the spotlight after US short seller Hindenburg Research linked Mauritius-based funds run by the London firm with Adani Group companies.
The Adani Group has categorically denied Hindenburg's accusations, calling them a “malicious combination of selective misinformation and stale, baseless and discredited allegations”.
Raj Bhatt, Elara Capital's chief executive and founder, referred the newspaper's request for comment to its compliance officer, who is yet to respond.
Meanwhile, the company's website notes that Bhatt founded Elara Capital Plc in 2002 primarily as a capital markets business, raising funds for Indian corporates through "GDR's [global depository receipt], FCCB's (foreign currency convertible bond) and the London AIM market (London stock exchange sub market).
It adds: "Since its first GDR issue in 2003, Elara has raised funds for several Indian corporates.
"Since then, the group has diversified further into corporate advisory, asset management, broking, mergers and acquisitions and private equity.
"Elara has not only diversified the product range, it also has diversified into other emerging markets through its fully licensed offices in New York, Singapore, Mumbai, Ahmedabad and London.
"Starting with fundraising, Elara soon evolved into a full service investment bank."