Who is Anti-India - 'Adani or Hinderburg'?

Gautam Adani, founder of the Adani group was ranked 155th richest person in 2020. But within three years, his net worth saw a skyrocketing growth, adding $100 billion dollars making him the 2nd richest person running a $120 billion dollar business. Most of the wealth generated from stock price appreciation of the group's 7 listed companies which have spiked an average of 819%. But how does this miracle happen during the lockdown period when 97% of Indian household income either stagnates or declines.

Well, Hinderburg Research, a US-based short selling investment firm, known for exposing fraud and irregularities and uprooting billion dollar companies may have an answer for it. In the report which they have published on 24th January 2023 'How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History', they have levied mainly four allegations against this group- stock manipulation, accounting fraud, undisclosed transactions and money laundering.

In India, law requires that minimum 25% shares of listed companies must be held by non-promoters to mitigate insider trading and create a fair balance of demand-supply for public investors. But Adani group promoters owned almost 74% of the stake, highly abnormal for any large listed companies but not unlawful. And the rest of the shares are publicly floating, well not so the case. The report finds that 38 Mauritius based shell companies and other shells in tax-heaven countries like UAE, Caribbean islands etc. are controlled by Vinod Adani(his elder brother) and close associates which has no reported employees, no independent number, address or online presence. These shells are hugely invested in Adani stocks, some of them are the largest "public" holders, leaving limited shares for actual public investors leading to huge demand which results in bumping of stock prices and stock manipulation. These shells also serve to launder money through Adani's private company to listed company's balance sheets in order to maintain financial health and solvency. But it is apparent that financial condition is not so strong as 5 out of 7 listed companies have a current ratio below 1 indicating liquidity pressure and they also took substantial debt including pledging shares of their inflated stock for loans. The report also finds numerous undisclosed party transactions by listed and private companies, seemingly an open violation of Indian Disclosure laws.

This 106-page report wrecked havoc on the Indian stock market, resulting in loss of almost $75 billion dollars in net worth of Adani group and drop of share prices by 7%. Then Adani group rebutted these allegations by putting 413 page response, the main point included that they are complying with all the Indian laws, are approved by Indian regulatory bodies, strong financial health of listed companies and this report by Hinderburg is a 'malicious story on Adani group and calculated attack on India'.

The regulatory bodies didn't pursue any strong independent investigation regarding these allegations basically giving clean-chit to the Adani group. Some said it's because of the close relationship between Indian Prime Minister Narendra Modi and Gautam Adani which goes the long way to Gujarat when Modiji was CM. But calling questions on irregularities and frauds as an attack on India just raises the suspicion because the real attack on India is to loot Indian taxpayers and investors money which needs to be thoroughly investigated. If creating fake growth story is a benchmark of patriotism,then Harshad Mehta would have been biggest patriot and Sucheta Dalal would be biggest enemy but sadly it's not the case.As Samuel Jackson said, "Patriotism is the last refuge of the scoundrel".