Adani Group’s $218 Billion Stock Manipulation And Accounting Fraud Scheme

Hindenburg Research unveils the outcome of its extensive 2-year probe, presenting proof that the Indian conglomerate, Adani Group, with a worth of INR 17.8 trillion (U.S. $218 billion), has perpetrated a bold stock manipulation and accounting fraud scheme throughout the years. Here’s everything about Adani Group’s $218 Billion stock manipulation and accounting fraud scheme.

Adani Group's $218 Billion Stock Manipulation And Accounting Fraud Scheme

Gautam Adani, the Founder and Chairman of Adani Group, has amassed a fortune of roughly $120 billion, increasing it by over $100 billion in the past 3 years primarily through stock price appreciation in the group’s 7 key listed companies, which have surged an average of 819% in that period.

The investigation entailed consulting with numerous individuals, including previous high-ranking executives of the Adani Group, scrutinizing thousands of documents, and conducting examination visits in nearly half a dozen countries.

Hindenburg Research argues that even disregarding the evidence from their investigation, the 7 key listed companies of Adani Group present a potential 85% loss purely on a fundamental basis due to overvalued prices.

The key listed companies of Adani Group have also taken on significant debt, including using shares of their inflated stock as collateral for loans, placing the entire group in a vulnerable financial position. 5 out of 7 key listed companies have reported ‘current ratios’ below 1, signifying short-term liquidity concerns.

The upper echelons of the group and 8 of 22 key leaders are Adani family members, a structure that places control of the group’s financials and key decisions in the hands of a select few. A former executive described the Adani Group as “a family business.”

The Adani Group has previously been the subject of 4 major government fraud investigations which have alleged money laundering, theft of taxpayer funds and corruption, totaling an estimated U.S. $17 billion. Adani family members are alleged to have cooperated to establish offshore shell entities in tax-haven jurisdictions like Mauritius, the UAE, and Caribbean Islands, generating forged import/export documentation in an apparent attempt to create fake or illegitimate turnover and to divert money from the listed companies.

Gautam Adani’s brother-in-law, Samir Vora, was accused by the DRI of being a ringleader of the same diamond trading scam and of repeatedly making false statements to regulators. He was subsequently promoted to Executive Director of the critical Adani Australia division.

Vinod Adani, the older brother of Gautam Adani, has been referred to in the media as “an elusive figure.” For his suspected role in overseeing a network of offshore businesses intended to enable fraud, he has frequently been at the focus of the government’s investigations into Adani.

The investigation, which involved downloading and categorizing the whole Mauritius corporate registration, revealed that Vinod Adani controls a massive network of offshore shell companies through a number of his close friends.

38 Mauritius shell companies that are under the control of Vinod Adani or his close friends have been uncovered. They’ve also located organizations that Vinod Adani also covertly controls in Singapore, the UAE, Cyprus, and a number of Caribbean Islands.

Several of the Vinod Adani-connected organizations have no visible indicators of functioning, such as no reported workers, no independent addresses or phone numbers, and no discernible online presence. Despite this, they have jointly invested billions of dollars in Indian Adani publicly listed and private firms, frequently without disclosing the related party nature of the deals.

There are also rudimentary efforts that appear to be aimed at concealing the true nature of some of the shell organizations. For example, 13 websites were made for Vinod Adani-associated organizations; many were suspiciously founded on the same days, including only stock photographs, naming no actual employees and listing the same set of absurd services, such as “consumption abroad” and “commercial presence”.

The Vinod-Adani shells appear to serve various purposes, including (1) stock parking / stock manipulation and (2) money laundering through Adani’s private companies into the balance sheets of listed companies in order to maintain the illusion of financial health and soundness.

All promoter holdings (known as insider holdings in the United States) must be reported by publicly traded corporations in India. In order to combat manipulation and insider trading, rules additionally demand that listed businesses have at least 25% of their float controlled by non-promoters. Due to significant promoter ownership, four of Adani’s listed companies are on the verge of delisting.

Many of the greatest “public” (i.e., non-promoter) holders of Adani stock are offshore shells and funds linked to the Adani Group, a situation that would subject the Adani firms to delisting if Indian securities regulator SEBI’s guidelines were followed.

Many of the ostensibly “public” funds have flagrant irregularities, such as being (1) Mauritius or offshore-based entities, frequently shells, (2) with beneficial ownership concealed via nominee directors, (3) and with little to no diversification, holding portfolios almost entirely comprised of Adani listed companies.

More than a year and a half after media and lawmakers first expressed concerns, the offshore funds are the focus of an ongoing inquiry, according to Right to Information (RTI) requests submitted to SEBI.

A former trader for Elara, an offshore firm with nearly $3 billion in concentrated Adani shares, including a fund that is 99% concentrated in Adani shares, stated that Adani clearly controls the shares. He explained that the funds are designed to obscure the ultimate beneficial ownership.

According to leaked emails, Elara’s CEO worked on agreements with Dharmesh Doshi, a fugitive accountant who collaborated on stock manipulation deals with Ketan Parekh, a prominent Indian market manipulator. The emails show that Elara’s CEO engaged with Doshi on stock deals after he escaped arrest and became widely recognized as a fugitive.

According to Legal Entity Identifier (LEI) data and Indian exchange data, another business called Monterosa Investment Holdings owns 5 ostensibly independent funds that collectively possess approximately INR 360 billion (US $4.5 billion) in shares of listed Adani companies.

The chairman and CEO of Monterosa was a director in three businesses alongside a wanted diamond dealer who allegedly stole $1 billion before leaving India. The fugitive diamond trader’s son married the daughter of Vinod Adani.

According to corporate records, a former affiliated party business of Adani made significant investments in one of the Monterosa funds that were allotted to Adani Enterprises and Adani Power, thus separating the Adani Group from the shady offshore funds.

Another Cyprus-based firm, New Leaina Investments, held roughly $420 million in Adani Green Energy shares until June-September 2021, accounting for 95% of its portfolio. According to parliamentary records, it was (and possibly still is) a shareholder in other Adani listed firms.

Amicorp, an incorporation services provider, operates New Leaina and has worked actively to assist Adani in expanding its offshore entity network. Amicorp established at least seven Adani promoter entities, at least seventeen offshore shell companies and entities affiliated with Vinod Adani, and at least three Mauritius-based offshore shareholders of Adani stock.


Statement – Adani Group
25 January 2023

We are shocked that Hindenburg Research has published a report on 24 January 2023 without making any attempt to contact us or verify the factual matrix. The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts.

The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming Follow-on Public Offering from Adani Enterprises, the biggest FPO ever in India. The investor community has always reposed faith in the Adani Group on the basis of detailed analysis and reports prepared by financial experts and leading national and international credit rating agencies. Our informed and knowledgeable investors are not influenced by one-sided, motivated and unsubstantiated reports with vested interests.

The Adani Group, which is India’s leader in infrastructure and job creation, is a diverse portfolio of market-leading businesses managed by CEOs of the highest professional calibre and overseen by experts in various fields for several decades. The Group has always been in compliance with all laws, regardless of jurisdiction, and maintains the highest standards of corporate governance.

– Jugeshinder Singh, Group CFO, Adani

Hindenburg Research issued the following response:

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