On January 24, 2023, a US based short-selling firm, Hindenburg Research founded by Nate Anderson specializing in forensic financial research, released a report charging the Indian conglomerate Adani Group led by Gautam Adani as the “largest con in corporate history”.

In the report titled, “Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con in Corporate History, Hindenburg Research alleges that their two-year investigation led to the revelation that the Adani Group has “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.

According to the report, Gautam Adani, Founder and Chairman of the Adani Group has a net worth of roughly $120 billion which has increased by more than $100 billion in the past three years primarily as a result of stock price growth in the group’s 7 key listed companies, which have increased by an average of 819% during that time.

The report said that Gautam Adani’s younger brother, Rajesh Adani, was accused by the Directorate of Revenue Intelligence (DRI) of playing a central role in a diamond trading import/ export scheme around 2004-2005. The alleged scheme involved the use of offshore shell entities to generate artificial turnover. Rajesh was arrested at least twice over separate allegations of forgery and tax fraud. He was later promoted to serve as Managing Director of Adani Group.

The report further alleged that Gautam Adani’s brother-in-law, Samir Vora was also accused of the DRI for the same diamond scam and making false statements to regulators, repeatedly. Vora too, was later promoted as the Executive Director of the “critical Adani Australia division.

Hindenburg states that the findings resulted in identifying 38 Mauritius-based shell companies controlled by Gautam Adani’s elder brother, Vinod Adani and several other similar entities based in Cyprus, the United Arab Emirates, Singapore and several Caribbean Islands.

Vinod Adani has often been at the focus of the government’s investigations into Adani for his suspected role in overseeing a network of offshore businesses intended to enable fraud.

The report also pointed out the debt on the company and that it had taken a short position in Adani Group Companies through U.S.-traded bonds and non-Indian-traded derivative instruments.

Following the release of the report by Hindenburg Research, the Adani Group responded back on January 29, 2023, and stated the allegations put on them are “nothing but a lie”. It said that “the document is a malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations to drive an ulterior motive.”

Tags: