Adani Enterprises' Australian unit, Bravus Mining & Resources, has been involved in a controversial project to develop the Carmichael mine in Queensland to sell thermal coal into India, despite concerns about global warming.
But it was a decision by the Queensland Supreme Court that found that Adani's coal export terminal engaged in monopolistic business practices that prompted Glass Lewis' recommendation.
The Queensland Supreme Court issued a A$107 million ($80.7 million) judgement against Adani Abbot Point Terminal in August last year, finding in favour of four companies that used the Abbot Point coal export terminal operated by Adani Enterprises.
"Given the judgement, the practices at Adani Mining reflect poorly upon business and risk management strategies from within Adani Enterprises, especially as the company had to inject funds into Adani Mining on an emergency basis to meet the judgement," Glass Lewis said.
Adani said that the judgement related to Adani's port business, a separate entity to Adani Mining.
Glass Lewis rates Adani as having "severe" risk of material financial impacts driven by environmental, social and governance (ESG) factors.
"We believe these matters should be concerning to shareholders in how Adani Enterprises’ board oversees risk in operations that may be associated with the globally unpopular Carmichael Mine."
An Adani spokeswoman said that Adani's coal was better quality than what it would replace in the market, resulting in fewer emissions for the same amount of energy.
Since only one member of the risk committee was up for reelection, Glass Lewis advised shareholders to vote against nominee Pranav Adani "due to his failure to fulfil his duty to shareholders as a member of the risk management committee."
In a separate note, it also flagged as a concern Adani's involvement with the development of a port in Yangon, Myanmar which has links to the military.
Adani has said that it could abandon the project and write down the investment if it is found to be in violation of sanctions imposed by the United States. read more
The Adani Family owns the majority of Adani Enterprises. Other top 20 investors include Nomura Holdings, Black Rock Inc, The Vanguard Group and Dimensional Fund Advisors.
($1 = 1.3259 Australian dollars) Reporting by Melanie Burton; Editing by Lincoln Feast and Sam Holmes