Can ‘survivor’s instinct’ help India’s Gautam Adani ride out Hindenburg fraud report?
- Hindenburg Research accused the Adani Group of accounting fraud, share-price manipulation and money-laundering, claims the conglomerate rejects as ‘baseless’
- Founder Gautam Adani’s ability to ‘manage uncertainties and turbulence’ will be tested in the weeks ahead as the report hits his fortunes
In a 413-page rebuttal, the Adani Group rejected Hindenburg’s charges as “baseless” and – wrapping itself in the Indian flag – called them a “calculated attack” on India’s growth story. “Fraud cannot be obfuscated by nationalism,” Hindenburg replied Monday.
In three days of trading, the accusations have wiped nearly US$72 billion from the group companies’ market value, according to Bloomberg, badly eroding Adani’s own fortune in the process. A US$2.5-billion share sale by the conglomerate due to close on Tuesday was just two per cent subscribed.
Adani, who last year was briefly the world’s second-richest person with a fortune of US$146.9 billion, has slipped to seventh with US$96.6 billion, Forbes says. Adani is the biggest target yet for six-year-old Hindenburg, a US-based short-seller, which has a feared Wall Street reputation for pursuing firms over alleged wrongdoing.
While the Adani Group has been under scrutiny before over opaque transactions, hefty debt and sky-high market valuations, Hindenburg’s blistering allegations could potentially prove the most damaging.