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Adani Ports to abandon Myanmar project if US classifies it as 'sanctioned country'

Adani Ports, which is India's largest port operator, has been facing criticism from various international investors over its plan to construct a container terminal in Yangon, Myanmar, on land leased from a Myanmar military-owned conglomerate

Adani Group Chairman Gautam Adani Adani Group Chairman Gautam Adani

Adani Ports and Special Economic Zone Limited has said it'll abandon its project in Myanmar and write-down its investments in full if the country is classified as a sanctioned country by the US. Adani Ports' statement comes following reports that Norwegian pension fund KLP is divesting its stake in the company as its links with Myanmar military breaches the fund's responsible investment policy.

Adani Ports, which is India's largest port operator, has been facing criticism from various international investors over its plan to construct a container terminal in Yangon, Myanmar, on land leased from a Myanmar military-owned conglomerate.

"The Company is in discussion with its US-based counsels to ensure that the Company complies with the OFAC [Office of Foreign Assets Control] sanctions programs. In a scenario wherein Myanmar is classified as a sanctioned country under the OFAC or if OFAC opines that we are in violation of the current sanctions, the company has plans to abandon the project and will write-down its investments in the project in full," Adani Ports said in a filing on Wednesday.

The write-down will not materially affect the balance sheet as it is equivalent to about 1.3 per cent of the total assets of APSEZ, the company said. It said KLP Fund held 1.05 lakh equity shares (0.005 per cent of paid-up capital) of the company as of March 31, 2021.

Also read: Norwegian pension fund KLP divests from Adani Ports over Myanmar military links

Adani Ports is unable to comment on the divestment made by the KLP Fund "as the Funds decide the investment plans basis their internal policy", it added. Adani Group has time and again refuted reports of it engaging with Myanmar's military leaders over the  $52 million-port deal.

In February this year, the United States had imposed economic sanctions on state-owned Myanmar Economic Corporation (MEC) following the military's detention of elected leaders and seizing power in a coup.

The Australian Centre for International Justice and Justice for Myanmar, in their reports leaked by Australia's ABC News Network in March, stated that Adani Ports is developing the container port in association with Myanmar Economic Corporation (MEC), a conglomerate funded by the military junta (military dictatorship in Myanmar).

Human rights organisations have said the Adani Group paid $30 million to the military-controlled Myanmar Economic Corporation in "land lease fees".

Also read: Adani Group refutes engagement with Myanmar's military over port deal