Azure Power Global’s U.S. dollar bonds and shares drop following some corporate scandals. The company’s most recently appointed CEO has resigned. Then, there is also a disclosure of data manipulation occurring in its plants. Due to these cases the company encountered criticism. Thus, people start to concern the company’s corporate governance. Worse, the shares in the Indian renewable power company also jumped to all time low. It is to US$3.59 on the NYSE from US$11.13, down 68%.
Furthermore, notes in Azure which would be due in December 2024 dropped to an all time low 65.12 from 83.53. Based on Refinitiv data the bonds for US$385m 3.575% bonds due in August 2026 plunged to 67. Recently, the bonds are also under pressure from ESG funds due to governance lapses at the company. This covers the annual report deadline issue. Nomura’s credit desk analyst, Eric Liu argues that the company could find a gradual trimming of positions by some ESG funds.
Meanwhile, Azure Power Global confirmed that they have gathered assistance from both legal counsel and forensic accounting. So, they have found proof of project data and information about certain employees’ manipulation. The allegation also figures out that the deviations from safety and quality norms have taken particular actions to redeem the issues. CreditSights give the opinion that the company encountered corporate governance issues.
The resignation also indicates that the company might perform poor internal control and compliance issues. The resignation of CEO Harsh Shah inflicted an immediate effect on Azure. Previously in April, Ranjit Gupta and Muralli Subramanian had also resigned from their position.
