This raging dumpster fire of a year keeps on giving. But in a weird and eventual turn of events, it has delivered a crippling blow to the empire of the 2nd (formerly) richest man in the world. Gautam Adani and the Adani Group have collectively lost Rs. 7,00,000 crore as of the publication of this article.
Hindenburg Research is an investigative research and reporting firm; they released a report of allegations and proofs accusing the giant, Adani Group, and Gautam Adani of manipulating stocks. The report reportedly took 2 years to be made and details the ‘largest con’ Adani Group has made in recent history. The report alleged that Adani Group has taken part in this con for over decades by stock price appreciation of the group’s 7 key listed companies, which resulted in an 819% spike. Besides the disclosure of the fraud, the organization released the report alleging the misuse of tax havens and flagging concerns about the level of debt. This is not the first time these allegations were raised against Adani Group; the Securities and Exchange Board of India has also been investigating the aforementioned allegations for a few years now. Adani Group has changed its CFOs five times in eight years, a key red flag of indication of potential accounting errors.
Gautam Adani and Adani Enterprises are one the most economical and financially secure groups of companies in recent years. The enterprises and its chairman at the helm have been dipping their hands in multiple private and public sector projects nationally and internationally. Adani has been known for having close ties with the Prime Minister of India. He is also known for his philanthropic endeavors, donating a sum of 100 crores to the PM Cares Fund.
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The report was launched days after the group’s follow on public offering (FPO) of Rs. 20,000 Crore. Adani Group has denied these allegations and called the report “a calculated attack on India.” Hindeberg Research reportedly said, “Adani Group has draped itself in the Indian flag while systematically looting the nation.” As a result of the subsequent backlash of the report, three days after its release, shares in listed companies controlled by Adani lost $48 billion in market value. After the allegations of fraud were made, bonds and shares of companies associated with Adani experienced a decline in value. Adani Enterprises Sector, the holding company of the group, has found its share prices considerably dropping, wiping over 100 billion. This is the biggest nosedive Adani stocks have experienced yet.
*As of the publication of this article, Adani Group has called off the sale of Rs. 20,000 Crore follow on public offering (FPO). The company made this announcement after considering market volatility.
Shares of the group continue to decline.