Hindenburg report on Adani: Key Findings

US-based investment research firm Hindenburg published a report titled ‘Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History’ on January 24, 2023. The report has apparently shaken Gautam Adani’s corporate empire and has led to a decrease in his net worth.

Let’s take a close look at the key findings of the Hindenburg report on Adani:

1. The Adani Group has been engaged in audacious stock manipulation and financial fraud scheme over the course of decades.

2. Gautam Adani has amassed a net worth of approximately $120 billion, primarily through stock price appreciation in Adani group’s 7 key listed companies. In the past 3 years, the stock prices of these companies have increased by an average of 819%, allowing Adani to add over $100 billion to his net worth.

3. The 7 listed companies of the Adani Group are overvalued by 85% or more.

4. The Adani Group companies is over-leveraged which poses a risk to creditors. In the past, members of the Adani Group have been reported to have failed to meet financial covenants and obligations, as revealed in regulatory filings.

5. The financial decision making of the Adani Group is unilateral and non-transparent since it is primarily controlled by Adani and his family members. The 22-person leadership team of Adani Group of Companies features at least 8 members of Adani family.

6. The Adani Group has been repeatedly accused of corruption, money laundering, and theft of taxpayer funds, with an estimated total of U.S. $17 billion. Investigations into these allegations have either been hindered or blocked by various branches of the Indian government.

7. Adani group’s offshore funds and shell companies secretly own stock in Adani’s listed companies, violating SEBI’s rules of a minimum 25% public shareholding to prevent insider trading and stock manipulation.

8. 4 of the Adani Group’s listed companies are approaching the brink of delisting in India due to their high reported promoter ownership.

9. The Adani Group’s key “public” investors exhibit behavior that is inconsistent with typical investment funds and are secretive in nature.

10. Adani Power’s largest “independent” public investor is an opaque entity based in Mauritius, known as Opal Investment Private Ltd.

11. The Adani Group has a history of being involved in alleged stock rigging with some of India’s most notorious market fraudsters.

12. Adani Group has funded some of its listed companies with massive amounts of money from Shell entities.

13. The Adani Group pumps in suspicious funds and then extracts money from publicly listed companies through suspect deals with related parties, using re-routing techniques to move money through the empire as necessary.

14. Audits of other companies within the Adani Group reveal a pattern of financial control weaknesses.

15. Numerous government investigations have revealed that a significant source of the Adani Group’s early cash inflow was due to the misappropriation of taxpayer funds, siphoning from listed companies, and corruption.

16. The Adani Group has been accused of intimidating and silencing critics, as well as allegedly exerting influence over legal proceedings.