Is the Fall of Adani Here? Let’s find out
How one report can lead to the fall of Adani
The fall of Adani is here, or not? At present, there are seven listed stocks of the Adani group- Adani Total Gas, Adani Enterprises, Adani Transmission, Adani Green Energy, Adani Ports, Adani Power, and Adani Wilmar. All these shares have collectively been falling ever since the Hindenburg report on the Adani Group emerged.
What does the report say?
The report by Hindenburg Research looks at the Adani Group and how they have managed to manipulate their stocks, indulged in money laundering, and carried out “the largest con in corporate history.”
- It states that all the seven listed stocks of Adani are 85% overvalued. These companies have grown at a phenomenal rate in the last three years. However, this growth cannot be substantiated by the company’s underlying financials.
- The Adani Group has faced allegations of corruption, money laundering, and the theft of taxpayer funds, the total amount of which amounts to U.S$ 17 Billion. The report also said that the Indian Government has stonewalled these investigations.
- The top leaders of the group are all family members. This “family business” has put the decision-making in a few people’s hands.
- Listed companies of the Adani group have major debts and pledged their shares, making their future questionable.
- Stock manipulation in the listed companies is not a surprise as SEBI has investigated it and found many guilty in this process.
- The independent auditor/s for Adani Enterprise seems questionable as no proper address or details were found about them.
- Vinod Adani, the elder brother of Gautam Adani is an “elusive figure” who is allegedly managing the offshore entities for the group and also indulging in fraud.
- The report also highlights that reporters, citizens, and politicians are afraid to speak up for fear of reprisal. This has allowed the group to carry on its fraudulent activities so far.
- The report has ended with 88 questions for Gautam Adani to answer in the wake of transparency. Some of the questions include:
1. What has been the full extent of Vinod Adani’s role in the Adani Group to date, including all roles on deals and entities that have been transacted with the Adani Group?
2. What information has been provided so far as part of the investigations, and to which regulators?
3. Recent Right-To-Information requests confirm that SEBI is investigating Adani’s foreign fund stock ownership. Can Adani confirm that this investigation is ongoing and provide details on the status of that investigation?
Read More- An ODE to Ravish Kumar and Journalism
What does the Adani Group have to say in response?
A media statement was released on the Official Twitter account of Adani Group. They called the report “malicious, mischievous and unresearched.”
Media statement – II on a report published by Hindenburg Research pic.twitter.com/Yd2ufHUNRX
— Adani Group (@AdaniOnline) January 26, 2023
Jugeshinder Singh, the CFO of Adani Group, said – “The investor community has always reposed faith in the Adani Group on the basis of detailed analysis and reports prepared by financial experts and leading national and international credit rating agencies. Our informed and knowledgeable investors are not influenced by one-sided, motivated and unsubstantiated reports with vested interests.”
The Adani Group also released a 17 page presentation in response to the report titled ‘Adani Portfolio Overview- Myths of Short Seller, January 2023.’ The presentation states that 21 of the questions raised were already responded to in the public disclosures made in 2015 Adani Portfolio presentation. It also adds that the fraud investigation made by the report are “devoid of facts.”
The Hindenburg Research company tweeted that it is ready for any legal action that Adani would throw its way. They also said that “any legal action taken against us would be meritless.”
Our response to Adani: pic.twitter.com/6NcFKR8gEL
— Hindenburg Research (@HindenburgRes) January 26, 2023