Hindenburg Research has alleged that Adani Group was ‘engaged in a brazen stock manipulation and accounting fraud,’ based on a two-year investigation conducted by the US-based investment research firm.
Hindenburg alleges that the INR 17.8 trillion (US$ 218 billion) Indian conglomerate Adani Group has engaged in a ‘brazen stock manipulation and accounting fraud scheme over the course of decades.’
The scathing report questioned how the Adani Group has used offshore entities in offshore tax havens like Mauritius and the Caribbean Islands, adding that certain offshore funds and shell companies tied to the Adani Group ‘surreptitiously’ own stock in Adani listed firms.
It also said key listed Adani companies had ‘substantial debt’ which has put the entire group on a ‘precarious financial footing,’ and asserted that shares in seven Adani listed companies have an 85% downside on a fundamental basis due to what it called ‘sky-high valuations.’
‘Gautam Adani, founder and chairman of Adani Group, has amassed a net worth of roughly USD 120 billion, adding over USD 100 billion in the past 3 years largely through stock price appreciation in the group’s seven key listed companies, which have spiked an average of 819 per cent in that period,’ the US researcher’s report noted.
The report comes ahead of the company’s INR 20000 crore follow-on public offer (FPO) of its flagship Adani Enterprises, to open on January 27.
Adani Group representatives said a statement in response would be issued later, describing the charges levelled as ‘malicious, unsubstantiated, one-sided, and having done with malafide intention to ruin its share-sale.’
‘The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts,’ the conglomerate said in a statement.
As this news broke, seven Adani Group stocks lost INR 46,086 crore in market cap on Wednesday.
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