Hindenburg’s Report Rocks Adani Group and Indian Business World
After the publication of a report from an activist investment firm Indian billionaire Gautam Adani is in trouble. The report alleged Adani group for large-scale fraud and misconduct in his multinational corporate.
What’s happening?
Hindenburg Research was founded by Nate Anderson, a chartered financial analyst, and a chartered alternative investment analyst in 2017.
Hindenburg Research published a 100-page report titled Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History on January 24th blaming the Adani group, a multinational corporation founded by Indian businessman Gautam Adani for propagating the biggest swindle in the history of the corporate world. The report said that the Adani group was involved in an audacious manipulation of stocks and fraud in an accounting scheme and greatly exaggerated its companies’ valuations in the order to maintain the state of financial position and integrity in spite of growing debts. The firm also brought forward that it had a brief stand against the Adani groups companies, predicting that the corporates stock prices are going to drop for the advantage of the company only.
The most dramatic claim made by Hindenburg is that Adani uses false companies to maneuver the share prices of its listed companies. Those were also used “for concealing” money into the balance sheets of the listed company which helps to maintain the appearance of financial position.
After the report was released, the group lost nearly $100 billion in market value, meanwhile, Adanis’s personal net worth has plunged by nearly $50 billion. Additionally, the claim emancipated the group’s “much-anticipated” secondary share offering.
In a stock offer that expired on Jan. 31, the group attempted to raise $2.5 billion, however, it finally canceled the offer on Feb1 when it got plunged almost about 30 percent. The money got was supposed to e returned to the investors.
Who is Gautam Adani?
Gautam Adani is a businessman and the owner and founder of the multinational corporate Adani Group, made up of at least seven publicly-traded companies incorporating a number of fields such as infrastructure, mining, and renewable energy.
Although he is not very famous in other parts of the world, the inventive billionaire is a very successful and powerful person in India, controlling the largest port in the country. But after the Hidenburgs report, once Asia’s richest man, Adani is now no longer even India’s, as his net worth has come down.
The controversy has brought his position down from the list of the world’s 10 richest people with Mukesh Ambani Indian petrochemicals tycoon now proclaiming more wealth.
How has the Adani Group responded?
The group claimed that Hinderberg’s report was “baseless” and “malicious,” and blamed the firm has some prejudice for releasing the document. The group wrote in its 413-page refutation, the report was planned with nepotism and contemplated only to create a false market in securities to enable Hindenburg, an accepted shorter, to gain huge financial profit via wrongful means with the sacrifice of the many numbers of investors. In a statement released afterward, the group told that the malevolent, malicious, unresearched report” which has negatively affected the company, its shareholders, and investors and has generated unnecessary distress for the Indian people.
The report also said that Hindenburg’s act shows a planned attack on India, the independence, integrity, and quality of Indian institutions, and the growth story and ambition of India. But after this refutation also Hinderberg and Anderson have not taken back their claims.
Are there larger implications?
The standoff could result in a negative effect on India’s transformation to clean energy. As Adani group has an engrossment in green energy, infrastructure, and power generation. The company is also a big creator of renewable energy and a generator of electricity. But also a big chunk of total revenue is generated from coal,
