the Adani Group had “engaged in a brazen stock manipulation"
Indian billionaire Gautam Adani saw more than £16 billion wiped off his fortune following fraud claims made by a US investment firm.
Hindenburg Research, a firm that specialises in “short-selling”, or betting against a company’s share price in the expectation that it will fall, said it had taken positions against listed Adani Group companies.
The firm accused the group of “pulling the largest con in corporate history”.
Hindenburg said it spent two years on its investigation.
It claimed that the Adani Group had “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades”.
Among the allegations include that a relative of Adani used offshore entities to launder money into the group’s listed companies, contributing to their “sky-high valuations” after an increase in stock prices over the past three years.
Hindenburg also questioned the alleged high amounts of leverage in the group’s entities.
Adani Group’s chief financial officer Jugeshinder Singh rejected the allegations, calling them “a malicious combination of selective misinformation and stale, baseless and discredited allegations”.
The group said it operated “in compliance with all laws” and said it was considering “remedial and punitive action” against Hindenburg.
Adani Group also questioned the timing of the report as it came just as Gautam Adani goes on a £2 billion share offering in India that is due to close at the beginning of February 2023.
Due to the Adani Group’s position as a leading corporate employer, the claims are significant for India and its financial markets, regulators and politicians.
This comes as Gautam Adani has embarked on an ambitious international expansion, enlisting global partners and investors to back the group.
Amit Tandon, managing director of proxy advisory firm Institutional Investor Advisory Services, said:
“Given the size and impact and scale of their investments, this is something that everyone will have their eye on now.”
An ally of Indian Prime Minister Narendra Modi, Mr Adani has long faced claims from opposition politicians alleging that he has benefited from his political ties.
For example in 2019, the Adani Group purchased all of a batch of six airports being privatised by the government, after rule changes allowed a company with no prior experience to become one of India’s largest airport groups.
One opposition leader said it was an “act of brazen cronyism”.
Mr Adani denies the claims but acknowledges that aligning business interests to government policy has given him a “tailwind”.
In a previous interview, Mr Adani was asked about his association with Narendra Modi. He said that one “cannot take personal help from Modi ji”.
In response to a question about bids, Mr Adani said that “not one business has been secured without bidding”.