India’s Adani empire strikes back after fraud report

Stocks in several of Gautam Adani’s companies clawed back on Monday some of last week’s heavy losses that wiped out almost $45 billion from the Indian tycoon’s vast business empire.

The slump was sparked by a report by US short-seller investment group Hindenburg Research that alleged “brazen stock manipulation and accounting fraud scheme over the course of decades”.

It meant that Adani, who was listed as the fourth richest person in the world with a net worth of $98 billion, saw his fortune halved, and his ranking fall to seventh place.

The conglomerate said it was the victim of a “maliciously mischievous” reputational attack and late Sunday issued a 413-page statement that it said rebutted Hindenburg’s claims.

Dubbing Hindenburg the “Madoffs of Manhattan” – a reference to crooked financier Bernie Madoff – the statement said Hindenburg’s allegations were “nothing but a lie”.

“This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” it said.

Hindenburg said in response that “India’s future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation.”

“In terms of substance, Adani’s ‘413 page’ response only included about 30 pages focused on issues related to our report,” it said.

“The remainder of the response consisted of 330 pages of court records, along with 53 pages of high-level financials, general information, and details on irrelevant corporate initiatives, such as how it encourages female entrepreneurship and the production of safe vegetables.”

Last week’s slump saw Adani – who is seen as close to Prime Minister Narendra Modi – tumble from third on the Forbes real-time rich list.

On Monday the 60-year-old was at 11th position in the ranking, which put his wealth at $90.7 billion, below fellow Indian tycoon Mukesh Ambani.

Shares in flagship Adani Enterprises rebounded 7.3% in Mumbai on Monday morning, while Ports traded 4.5% higher.

But Adani Total Gas saw trading halted on Monday again after a 20% plunge. Adani Power and Adani Wilmar also hit their circuit breakers after falling 5% each.

Adani Transmission down 18.3%, and Adani Green Energy lost 13% on Monday morning.

Adani’s recently-acquired cement companies ACC and Ambuja Cements rebounded to trade 2.6% and 5.7% higher after deep cuts last week.