Adani Group mentioned India in the 413-page report, but Adani was the subject of the allegations.
Adani Group mentioned Attack on India in the 413-page report, but Adani was the subject of the allegations.
The Adani Group responded to the Hindenburg report in a 413-page document published late Sunday night, claiming that the short-seller had misrepresented offshore businesses and made representations about related parties and related party activities that violated Indian law. According to the corporation, Hindenburg’s assertions and inquiries lacked supporting data and were merely “unsupported guesses.”
Following all of the accusations against Adani Group, Adani submitted a 413-page rebuttal to the Hinderburg investigation. Adani did mention India in the 413 pages, while the Hinderburg report concentrated solely on the businesses that Adani owns.
Is Adani the sole one in charge of India? Or does this imply that Adani is the India representative? Because Although over 140 crore people are living in India, Adani claims that the Hinderburg Report is a deliberate attack on the country’s development.
Why is he making India suffer? Even though other Adani groups are already being defrauded, they must join forces to protect the Adani group. Why does Adani need the assistance of India in the claims if he is so powerful and can affect the overall prosperity of India? If he is innocent, why can’t he respond with documentation of their company facts without bringing up India?
Additionally, the shares of the Adani Group began to decline after the claims made by the Hinderburg. Is Adani Group’s credibility so low that Investors have started to withdraw from the company they are or want to invest in? A single report from the Hinderburg probably paints a clear picture of the scams committed by Adani against investors and the Indian people.
Because the allegations were only made against the Adani Group and not as part of a planned assault against India, in India, there are other businesses besides Adani. Although entering an umbrella is not a choice, it is the Adani Group’s only means of protection.
Hindenburg Report
Hindenburg had posed several allegations and queries to the Adani Group regarding offshore firms. It has been claimed that members of the Adani family allegedly operated offshore shell companies in tax havens like Mauritius, the United Arab Emirates, and the Caribbean Islands and that they reportedly created false import and export documentation to produce fake, illegitimate turnover and rob listed companies of their money.
Rajesh Adani, the younger brother of Adani Group Chairman Gautam Adani, and Samir Vora, his brother-in-law, were allegedly significant players in the diamond trading import and export scheme in 2004–2005, which entailed the use of offshore firms to create fictitious sales.
Vinod Adani, the elder brother of Gautam Adani, was named in the study with the most severe acseverens. He played a crucial role in overseeing a network of offshore firms used to commit fraud. It stated that Vinod Adani “manages a massive maze of offshore shell corporations through close associates.”
The report went on to state that it had discovered 38 shell companies with headquarters in Mauritius that Vinod Adani or his close friends allegedly controlled and that he also had “covertly controlled” additional businesses in Cyprus, the United Arab Emirates, Singapore, and several Caribbean Islands.
Hindenburg claimed that many of these businesses lack any “clear” indications of their existence, such as reported personnel, independent addresses, phone numbers, or an online presence.
However, it said that “despite this, they have shifted billions of funds into Indian Adani publicly listed and private firms, frequently without necessary disclosure of the related party character of the deals.”
According to Hindenburg, Vinod Adani shells have several uses, including stock parking, stock manipulation, and money laundering “via Adani’s private companies into the balance sheets of the listed companies to maintain the illusion of financial health and stability.”
Additionally, it was asserted that many of the most significant “public” shareholders in Adani Group are offshore shell corporations and funds, which might result in the delisting of Adani Group entities if SEBI regulations were to be followed.
413 Pages of Adani Group’s Response
The Adani Group, led by billionaire Gautam Adani, has responded in 413 pages to a 106-page analysis by Hindenburg Research, claiming that the accusations made by the “Madoffs of Manhattan” are “nothing but a falsehood” and that the report is neither “independent” nor “objective” or “fully researched.”
The group claimed that New York-based Hindenburg was an “unethical short seller” who would only profit from the decline in share prices that would follow. “Hindenburg took “short positions,” and to manipulate the share price and depress it to make an erroneous profit, Hindenburg released a document to do so. This created a phoney market.”
According to the group, the accusations spread like wildfire, erasing a large portion of investor capital and bringing Hindenburg “a profit.” It says that public investors suffer losses while Hindenburg experiences “windfall gains.”
The study poses “88 inquiries,” 65 of which are concerned with data held by Adani Portfolio companies. Disclosed in their annual reports, which are available on their websites along with other documents like financial statements, memorandums, and occasionally stock exchange disclosures.
The remaining 23 questions, it claims, are divided into 18 that concern public shareholders and other parties (rather than the Adani portfolio firms), while the remaining 5 are unfounded accusations based on “imaginary fact patterns.”
The Adani Group market valuation had decreased by more than 3.86 lakh crore by the Friday market closing, reflecting the downward trend that has been underway since the release of the Hindenburg report on January 24. The planned follow-on public offer (FPO), which would have been the biggest ever in Indian capital markets, would have reduced Adani Group’s market capitalisation by 19 times.
The Adani group claims Hindenburg is an organisation “without integrity or ethics” and has had “a substantial and unprecedented harmful impact” on its investors. The organisation claims that this t just an unjustified attack on one particular company and a “planned attack on India,” the independence, integrity, and excellence of Indian institutions and the country’s ambition and growth story.
The group claims that the Appellate Tribunal (CESTAT), in its favour, closed all cases involving the alleged involvement of the Adani family in the round-tripping of diamond consignments.
The Hindenburg report (which contemptuously raises issues on the competency of the Appellate Tribunal with spurious assertions that it has ignored evidence) purposefully ignores and conceals the fact that the Supreme Court itself has twice confirmed this decision, further reaffirming it.
Allegations and the Adani Group’s Reaction.
The Adani Group responded to claims regarding offshore entities and other matters as follows:
Allegation: According to Hindenburg, up to 30-47 per cent of the annual delivery volume of Adani equities was made up of specific offshore organisations holding concentration positions in the company’s stock.
Citing their research, it referred to the situation as a significant irregularity and demanded an explanation from Adani over the trade volume coming from this concentrated group of offshore funds. Additionally, it said that the nature of the transaction indicates that these entities are engaged in manipulative wash trading and asked Adani for comment.
According to Adani Group’s statement, the entities mentioned are public shareholders in the listed companies. It said that they have no control over who buys, sells, or owns the publicly-traded shares or how much volume is moved, saying that any suggestions that they are in any way to the promoters are false.
It said that it is not required to obtain this information and has no influence over the funding source for such public shareholders. The conglomerate stayed silent on trade trends or the actions of public shareholders.
Claim: Despite Ami corp’s proximity to the 1MDB global fraud case, the Hindenburg investigation called into doubt Adani’s close relationship with Amicorp. According to the statement, Amicorp founded seven of Adani’s promoter firms, at least 17 offshore shell companies and organisations linked to Vinod Adani, and at least three Mauritius-based offshore stockholders of Adani stock.
Adani Group’s response: According to Adani Group, Amicorp is a reputable company that offers secretarial services to numerous businesses, including Adani. It claimed that the “unrelated controversies” were unimportant and accused Hindenburg of creating a misleading narrative. It requested that Hindenburg writes to Amicorp for a response if it wanted more information on the scandal they think Amicorp is associated with.
The CEO of Trustlink, whom the Department of Revenue Intelligence has accused (DRI) of participating in fraud using Adani’s shell businesses, is frequently seen bragging about the company’s tight ties to Adani, according to Hindenburg. The whole hist the CEO’s interactions with the Adani Group was demanded.
Response from Adani: The company claimed that Trustlink serves other organisations besides Adani by offering secretarial services. It further said that the CEO of Trustlink is not a director of any Adani firms. Aside from making fun of Hindenburg, the company claimed that it viewed a person’s LinkedIn job listing as “touting” a “close relationship.” It contended that Hindenburg was ignorant of the rules governing pertinent areas of law.
Vinod Adani, Gautam Adani’s older brother, is allegedly responsible for managing a network of shell companies, according to the allegation made by Hindenburg Research. Vinod Adani’s involvement in the business, deals, and entities was requested in detail by the corporation.
Additionally, it demanded information about Vinod Adani-related entities’ transactions with private and publicly traded entities and the number of Adani entities for whom he is either a director, shareholder, or beneficial owner.
It also requested more information from the corporation about the roles played by the 13 websites created on the same day and using the same “nonsense services.” It said, “We trade in Services such as the sale and delivery of an intangible product, such as a Service, between a producer and consumer. This was stated on one of the websites of an organisation connected to Vinod Adani. Who knows what that even means?
Adani’s reply: The conglomerate gave a similar answer for each of the five queries. According to the statement, Vinod Adani is not mentioned as having any managerialAdani-listed any Adani listed companies or subsidiaries.
According to the report, Vinod Adani plays no part in the business’s day-to-day operations. Hence these inquiries are irrelevant. In addition, The Adani Group stated that it was not in a position to respond to Hindenburg’s accusations of Vinod Adani’s business practices or transactions.
The statement said that all transactions made by Adani portfolio firms had been adequately identified and disclosed as related party transactions by Indian law. Hindenburg allegedly questioned the part of Adani Green Energy that was sold to foreign companies, including those from Mauritius and Cyprus included in its report.
It requested information on the list of offshore entities participating in the OFS deals. Additionally, it questioned Group CFO Robbie Singh’s claims on June 16, 2021. He claimed that funds like the Mauritius shareholders still needed to make new investments and had acquired shares of other Adani stocks via vertical demergers instead. Evidence, it claimed, demonstrated the opposite.
The Adani Group responded similarly to all three charges. It claimed that these accusations resulted from a lack of knowledge of Indian law. According to Indian law, any listed entity must have a public shareholding of at least 25%. Following the demerger from AEL in June 2018, shares of AGEL were listed on the stock market, and the firm was required to comply with the regulations within a year of the listing date.
“The OFS process is a regulated process that is carried out through an automated order book matching mechanism on the stock exchange’s platform. The purchasers are not accessible to anyone on the forum, and any entity does not control this process, it added.
Neither the seller nor the buyer has any control over it. According to the report, the seller of the securities cannot see the buyer of the guards on the stock exchange platform. The business claimed that both before and after the completion of the offerings for sale, the exchanges were already aware of AGEL’s shareholding pattern.
Let’s sum up the situation in one sentence: If Adani is right and the accusations against his group are untrue, why does he require the support of the entire Indian nation? Truth is always self-sufficient; people can handle it on their own. If Adani is correct, then he must face this situation single-handedly. Dragging the entire nation into it will hamper the image of India.
edited and proofread by nikita sharma
