Gautam Adani: Short seller Hindenburg reiterates fraud allegations

Bangkok India’s richest entrepreneur sees the allegations of fraud against his company as an attack on the entire country. The allegations by US financial analysts are a “calculated attack on India’s growth history and ambitions,” says Gautam Adani, founder of the Adani conglomerate.

In a more than 400-page document, the 60-year-old tries to refute the suspicion that his rise to one of the richest men in the world was not right.

The US short seller Hindenburg Research published a list of such allegations last week. At its core, it is about the suspicion of price manipulation and balance sheet falsification with the help of a network of letterbox companies, which are apparently at least partly controlled by Adani’s older brother Vinod. Hindenburg spoke of one of the “most egregious examples of corporate fraud in history”.

On Monday, the investment company followed up: The Adani Group had “systematically plundered” India, it said in a reaction to the group’s statement. Hindenburg rejected the claim that the criticism of Adani was intended to harm India: fraud cannot be disguised by nationalism.

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“We believe that India is a vibrant democracy and a rising superpower with an exciting future,” the company said. “We also believe that India’s future will be hampered by Adani.”

Short seller Hindenburg considers key questions unanswered

Hindenburg complained that the group left key questions about the criticized transactions with Vinod Adani’s letterbox companies unanswered. Adani said they have no control over who buys the company’s shares and where the money that went into the deals comes from. Hindenburg criticized the fact that essential information was missing to be able to determine whether artificially inflated sales, money laundering or price manipulation had occurred.

The US company Hindenburg started the fraud scandal involving the US electric truck manufacturer Nikola in 2020. Short sellers bet on falling prices of the companies they are attacking. In the case of Adani, founder Nathan Anderson’s calculations have worked so far: After the price had slumped last week, the loss in value of the group of companies since the report was published on Monday increased to almost 70 billion dollars.

According to calculations by Forbes magazine, Gautam Adani’s private fortune shrank by around $35 billion to $88 billion within a few days. He was only just able to defend the title of the richest man in Asia against his compatriot Mukesh Ambani, whose fortune was estimated at 84 billion dollars.

Several of Adani’s subsidiaries – Adani Gas, Adani Transmission and Adani Green Energy – again lost more than 20 percent of their value on Monday and were suspended from trading.


The central holding company Adani Enterprises increased in value by four percent. However, this could not compensate for the massive losses of the past week.

The plan to raise 2.5 billion dollars by issuing new shares is also faltering: the major shareholder IHC from Abu Dhabi announced on Tuesday that it would invest a further 400 million dollars. Otherwise, demand remained meager shortly before the end of the subscription period. After the price slide, the issue price of the shares is significantly higher than the current stock market price and therefore no longer appears attractive for private investors.


An advertising offensive by the group did not change anything: Adani booked full-page advertisements on the front pages of the major Indian newspapers at the weekend. In it, the group described itself as a “company for sustainable value creation and the enrichment of life”.

Adani’s companies control important parts of India’s infrastructure – including ports, airports, power grids, power plants and roads. The expansion of the conglomerate is regularly based on the economic development goals of the government of Prime Minister Narendra Modi – Adani has announced billions in investments in the production of green hydrogen.

Adani scandal could threaten Modi

In the year before the next general election, the Modi scandal could now develop into a serious political problem. The opposition Congress Party accused the prime minister of being too closely related to the businessman – and speculated whether Adani would be covered by the government.

“Has the Modi government decided to turn a blind eye to the illegal activities of its pet conglomerate?” asked the party’s secretary-general, Jairam Ramesh. He also accused the government of jeopardizing public funds through loans and investments in Adani companies by state banks and the state insurer LIC.

LIC’s investments in Adani companies alone amount to around four billion dollars. The insurer announced talks with the group management for the coming days: “Since we are a large investor, we have the right to ask questions.”

More: Asia’s richest man under pressure

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