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US short seller alleges ‘brazen’ fraud by Adani

Updated on: 26 January,2023 11:38 AM IST  |  New Delhi
Agencies |

Hindenburg, a US-based investment research firm that specialises in activist short-selling, said its two-year investigation reveals that “the Rs 17.8-trillion ($218 billion) Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades"

US short seller alleges ‘brazen’ fraud by Adani

Gautam Adani, founder and chairman of Adani Group

Well-known US activist investor Hindenburg Research has alleged that Adani Group was “engaged in a brazen stock manipulation and accounting fraud”, a charge rejected by the conglomerate.


Hindenburg, a US-based investment research firm that specialises in activist short-selling, said its two-year investigation reveals that “the Rs 17.8-trillion ($218 billion) Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.”


The report comes ahead of a Rs 20,000-crore follow-on share sale of Adani Group’s flagship Adani Enterprises. The follow-on public offer (FPO) is slated to open on January 27 and close on January 31.


Adani Group said it was shocked to see the report that came out without any attempt to contact it to get the factual matrix. It went on to question the timing of the report, saying its publication ahead of the FPO “clearly betrays a brazen, malafide intention to undermine Adani Group’s reputation with the principal objective of damaging” the issue.

Also Read: Adani Group moves Kerala High Court seeking central forces protection at Vizhinjam port

“Gautam Adani, founder and chairman of Adani Group, has amassed a net worth of roughly $120 billion, adding over $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 Hindenburg’s report said.

The report details a web of Adani-family controlled offshore shell entities in tax havens spanning the Caribbean and Mauritius to the UAE, which it claims were used to facilitate corruption, money laundering and taxpayer theft, while siphoning off money from the group’s listed companies.

“Our research involved speaking with dozens of individuals, including former senior executives of Adani Group, reviewing thousands of documents, and conducting diligence site visits in almost half a dozen countries,” it said. Hindenburg claimed to have uncovered “rudimentary efforts seemingly designed to mask the nature of some of the shell entities.” 

“Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its 7 key listed companies have 85 per cent downside purely on a fundamental basis owing to sky-high valuations,” the report said adding key listed Adani companies have also taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing. CreditSights, part of the Fitch Group, had in September last year described the group as “overleveraged”.

Adani stocks sink market by over 1%

Indian shares fell to their lowest level in over a week on Wednesday, dragged by Adani group stocks after a short-seller raised concerns about its debt. Stocks of the seven listed Adani group companies fell between 1.5% and 9%.

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