Adani Group, India’s largest corporation, accused by Hindenburg Research of “biggest scam” in history

Adani Group, India’s largest corporation and an aspiring media empire builder, has been accused by a US investment firm of “pulling the biggest scam in corporate history”.

Hindenburg Research, a firm that engages in shorting company shares in anticipation of a stock price drop, released a research paper on Tuesday saying the $218 billion Adani group was involved in a “blatant stock manipulation”, “accounting fraud” and money. washed.”

Adani Group denied the allegations. “The group has always complied with all laws,” Chief Financial Officer Jugeshinder Singh said in a statement on Wednesday.

The group’s founder, Gautam Adani, who is a close ally of Indian Prime Minister Narendra Modi, is estimated to be the richest person in Asia and the third or fourth richest person in the world, with a personal fortune of about $120,000. millions.

Adani Group is primarily interested in sectors including port management, electric power generation and transmission, renewable energy, mining, airport operations, natural gas, food processing, and infrastructure sectors.

Adani Group’s media interests are new and small compared to the rest of the conglomerate. In May of last year, he bought a small digital publisher. In August, Adani’s AMG Media Networks Limited (AMNL) made a hostile bid for New Delhi Television (NDTV), one of India’s most trusted news sources, completing the 65% acquisition at the end of December. Hindenburg does not accuse the media companies of any wrongdoing.

To qualify as the biggest corporate scam in history, the fraud would have to be bigger than the $60 billion Ponzi scheme in respected Wall Street titan Bernie Madoff’s private investment advisory business.

Hindenburg says he has investigated the Adani Group for two years and similarly finds that Indian regulators don’t do their job or members of the media are intimidated and silent. “Criticism of India’s elite businessmen and politicians has increasingly resulted in the imprisonment or outright murder of journalists. Stock market analysts have been arrested for writing negatively about companies. Amid this climate of suppressed expression, corporate fraud has largely gone unchecked,” he says. “Adani has accomplished this mammoth feat with the help of enablers in the government and a cottage industry of international companies that facilitate these activities.”

Among the details, Hindenburg accuses the group of: inflating revenue and profit figures; close family control despite group size; use of offshore companies in (Mauritius, Cyprus, the United Arab Emirates, Singapore and the Caribbean) to disguise true ownership; and the use of foreign funds controlled by Adani to make publicly traded entities appear more creditworthy than they actually are. Hindenburg also catalogs several previous investigations by Indian regulators into family members and associates for theft of taxpayer funds, corruption and a diamond trading scam.

Adani Group’s Singh said the company was shocked by the report, calling it a “malicious combination of targeted misinformation and outdated, unsubstantiated and discredited allegations.”

“The timing of the report’s publication clearly reveals a brazen and bad faith intent to undermine the reputation of the Adani Group with the primary aim of damaging Adani Enterprises’ upcoming follow-on public offering,” Singh said in a statement.

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