Reference News Network reported on February 18 that the Hong Kong Asia Times website. Published an article about Adani crisis titled “Adani’s Accusations Wreck India’s Image” on February 13. The author was Ravi Kant. The content is compiled as follows:
On January 24 this year, a report released by the US short-selling agency Hindenburg Research shocked the whole of India. In the report, Hindenburg Research alleged that Gautam Adani, who at the time was among the world’s three richest people. He was carrying out the biggest scam in corporate history.
The research firm alleges that the Adani Group has been involved in stock manipulation. And money laundering and financial fraud for decades. The report also highlighted that stock valuations of the seven listed companies under the group were overvalued by 85%.
According to Hindenburg Research, the 106-page report was written over a two-year period. The firm has a short position in Adani Group through US-traded bonds, and non-India-traded derivatives, as well as other non-India-traded reference securities.
These claims are supported by documents obtained from the Indian government and regulators, the report claims. The firm appears to have conducted a detailed investigation before shorting it.
One of the main concerns raised in the report concerns the corporate governance of the Adani Group. Members of the Adani family created and managed “a vast maze of offshore shell companies” in tax haven countries including Cyprus, Mauritius and the United Arab Emirates, the report said. Hindenburg Research said the companies had no registered employees, separate addresses, phone numbers or Web addresses.
Still, together they moved billions of dollars to Adani India’s listed and private entities. Often without the required disclosure of the related-party nature of the transactions.
Gautam Adani’s brothers Vinod and Rajesh, as well as his brother-in-law Samir Wola. Were included in the report for various reasons. The report further stated that Vinod Adani and his close allies allegedly controlled 38 shell companies in Mauritius. And that he also “secretly controlled” other businesses in Cyprus, the UAE, Singapore and several Caribbean islands.
The day after Hindenburg Research’s report, Adani Group entities lost about $9 billion on the stock market, and it’s continuing. Adani Enterprises approved a $2.5 billion follow-on public offering on Jan. 27 despite a quick sell-off by investors. The follow-on public offering did not go well, however, and the company said it would return its proceeds.