Adani Group, a $218 billion Indian conglomerate, has been under fire recently. Hindenburg Research, a notorious short-seller, is aiming at Adani Group, claiming it’s guilty of the biggest corporate fraud ever seen.
Is Gautam Adani in trouble?
Hindenburg is shorting the stock of the third richest man on the planet. Adani’s wealth is currently around $120 billion, up $100 billion from the previous three years. Now Hindenburg is short-selling the company, which would be its largest target ever.
Hindenburg released a lengthy analysis at the opening of the Indian stock market on Wednesday, calling Adani’s actions the biggest fraud in corporate history.
Today we reveal the findings of our 2-year investigation, presenting evidence that the INR 17.8 trillion (U.S. $218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades, the report states.
Adani allegedly used shell companies to run this scheme. A number of corruption, money laundering, and theft of public funds investigations have been conducted against the Adani Group, as mentioned by Hindenburg.
Additionally, it claimed that seven publicly traded firms belonging to the Adani Group are grossly overvalued. No wonder. The stock is up 700% in just two years, and up over 1,400% in three years.
Adani Group stock chart, source: finance.yahoo.com
Of course, Adani declined any allegations and flagged them as malicious and baseless. Instead, Adani accused Hindenburg of sabotaging the planned $2.5 billion stock sale that was supposed to happen on Friday.
Over the course of 40 years, Adani has built an empire that includes everything from manufacturing to airports to solar power to telecoms. Adani has really become a major participant in the development of the country’s infrastructure.
But some have accused him of unduly benefiting from his association with Prime Minister Narendra Modi. Adani’s fortune has apparently grown by more than 200% since Modi took office.
This year will be a serious test for Adani, as his net worth already plunged by a few billion dollars along with his stock. While most stocks struggled in 2022, Adani Group skyrocketed higher. Hindenburg must be really confident in its bet, shorting one of the largest companies in the world.