Jo Johnson, investment banking and Adani’s accusations


Well, well… Lord Jo Johnson has abruptly resigned as head of an investment bank linked to Indian business magnate Gautam Adani, after less than a year on its board.

Lord Johnson, the younger brother of former Prime Minister Boris Johnson (and a former FT journalist), resigned from Elara Capital on February 1, Companies House records show. FT Alphaville visited their offices on Tuesday to inquire about Johnson’s involvement, and was politely but quickly shown to the door.

Short seller Hindenburg Research has alleged that London-based Elara, a major investor in Adani’s listed businesses, used Mauritius-based funds to conceal ultimate ownership of Adani’s shares.

Adani, who has seen losses on his shares of more than $100 billion since the report was published, denies the allegations, while Elara and Johnson have not responded to questions from Alphaville and the FT on the subject.

Johnson resigned as director of Elara on February 1, after we contacted him for comment.

It marks the second time Johnson has recently stepped down from a position at the company, stepping down as an adviser to Bifinity, a UK payments business backed by cryptocurrency exchange Binance last year.

johnson baby

These (very) short-lived gigs are quite a contrast to Johnson’s otherwise delighted portfolio career.

Born in 1971, the younger (full) brother of former Prime Minister Boris Johnson started at Deutsche Bank as an investment banker, became financial times journalist, eventually heading Lex (“one of the most influential posts in British financial journalism,” according to Wikipedia), then Tory MP, then minister, and finally, thanks to older brother, Lord.

Even after her move to the Upper House, JoJo has continued to dabble in different roles, with some 👀 results. In December, following the collapse of FTX, the Telegraph reported that he had left his post as an adviser to Bifinity, a payments firm backed by cryptocurrency exchange Binance. It seemed like a case of wrong place, wrong time: who knew cryptocurrency was risky?

Other work after Commons took him back to his roots. Elara Capital, a London-based investment bank, announced last June that Johnson had joined its board of directors. Speaking at the time, its chairman, Raj Bhatt, said: “Elara Capital will benefit from Jo’s experience and will also seek guidance from him on investments in exciting growth sectors such as technology and education.”

A screenshot from Companies House earlier this week. Johnson already resigned

how it looks now

Here is some other recent news concerning Elara:

Indian billionaire Gautam Adani has broken his silence and defended his industrial empire despite the cancellation of a $2.4 billion share sale following an attack by a short seller.

Losses on Adani Group shares rose to $100 billion on Thursday after the conglomerate’s flagship company canceled the share issue, saying it “would not be morally right” to proceed given the share sell-off.

Adani is reeling from the US-based Hindenburg Research allegations. You can read all the FT coverage here.

Some prominent Hindenburg allegations concern Elara, who was one of the book runners in Adani’s now-abandoned stock sale. According to his report:

— A former trader at Elara, an offshore fund with almost $3B in concentrated holdings of Adani shares, including a fund that is ~99% concentrated in Adani shares, told us it is obvious that Adani controls the shares. He explained that the funds are intentionally structured to hide their ultimate beneficial owner.

This seems unfortunate for Johnson. Alphaville has contacted both him and Elara for comment. Adani denies Hindenburg’s claims.

Earlier this week, we went looking for answers.

To the west Ho!

In an attempt to dispel its reputation for being too online, FT Alphaville visited Elara’s London office on Tuesday afternoon. A short ride on the Central and Bakerloo lines brought us to the slightly fresher air than Marylebone.

Elara is based at 248 Marylebone Road, just around the corner from the train station made famous by the seminal 2022 Your Christmas or mine?

We asked to go to Elara’s office and the receptionist sent us to the top floor of the building, six. A nondescript lobby with wavy green artwork greeted us:

Through the (unlocked) door was a brightly lit hallway leading off from several fishbowl-style rooms. In the first room three people were gathered around a Bloomberg Terminal.

Was anyone able to answer questions about the relationship between Elara and Adani? A man led us to a kitchen space, where we were told to wait. Shortly after, he returned, giving his name as Ahmed, but refused to provide a last name. Ahmed told FTAV that there was no one in the office who could answer our questions at the moment and kindly suggested that we leave.

On the short walk back to the elevator, Alphaville showed Ahmed a printout of Jo Johnson and asked if he had ever been seen in the office. Ahmed said he did not recognize the man, but noted that he looks a lot like Boris. We left.

Elara? (I barely know her)

Raj Bhatt founded Elara in 2002. The group’s website says it “was established primarily as a capital markets business, raising funds for Indian companies through the GDR, FCCB and the AIM London market.”

Since then, he has expanded into M&A and private equity advisory, brokerage and asset management. In addition to London, it has offices in New York and Singapore, two in India and one in Mauritius, according to its website.

Elara’s relationship with Adani had drawn attention long before Hindenburg published his report last week. A Bloomberg story from July 2021 (non-paywall link via Al Jazeera) said:

Four Mauritius-based funds that have drawn attention for parking nearly all their money in companies controlled by Indian billionaire Gautam Adani have a history of investing in companies that either defaulted or were investigated for wrongdoing.

One of these funds was Elara’s India Opportunities Fund, a $2 billion fund (as of noon Wednesday) that predominantly owns Adani businesses:


One allegation made by Hindenburg is that four of Adani’s listed companies are about to breach the Securities and Exchange Board of India’s rules limiting insider ownership to the bottom 75 percent. Crossing this threshold could lead to them being delisted.

Hindenburg alleges that funds such as Elara’s India Opportunities Fund are being used to circumvent this rule, disguising the actual level of insider ownership:

For many Adani-listed companies, a large portion of their “public” shareholders are funds based in the opaque jurisdiction of Mauritius. It is important to note that the funds identified in this section, which we believe should be classified as “promoting” (insider) entities, own enough shares of Adani-listed companies to place four of them well above the 75 threshold. %, which causes it to be dropped from the list.

© Hindenburg Research

Adani strongly denies the accusations made by Hindenburg, saying:

Each of the entities referred to in the above inquiries are public shareholders of the companies listed in Adani’s portfolio. Insinuations that they are parties in any way related to the promoters are incorrect.

A publicly traded entity does not have control over who buys/sells/owns the publicly traded shares or how much volume is traded, or the source of funds for such public shareholders nor is it required to have such information for its public shareholders under the Indian laws. . Therefore, we cannot comment on the business pattern or the behavior of public shareholders.

You can read Adani’s full 413 page response here.

Read more:
— Jo Johnson resigns as director of UK firm with links to Adani
— ‘Extreme leverage’? Adani’s debt-fuelled expansion under scrutiny
— “Short Seller Myths”


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