Hindenburg Research, in a lengthy report on the Adani Group, said the company “has been involved in brazen stock manipulation and accounting fraud schemes for decades”.
Hindenburg Research, an investment research firm focused on activist short-selling, has released a scathing report on the Adani Group. The report is based on their findings from a two-year investigation. It said the company had “engaged in blatant stock manipulation and accounting fraud schemes for decades”. It said they spoke to dozens of individuals, including former and senior executives of the Adani Group, reviewed thousands of documents, and conducted due diligence. Visited sites in about half a dozen countries.
“We found evidence of blatant accounting fraud, stock manipulation, and money laundering at Adani over decades. Adani has pulled off this massive feat with the help of a cottage industry of government and international companies that facilitate these activities,” the Hindenburg report said.
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Adani Enterprises share price:
Adani Group CFO Jugesinder Singh, responding to the report, said Hindenburg had made no attempt to contact them or “verify the factual matrix”. It said the report was an attempt to discredit the collective before its FPO. “The report is a malicious combination of electoral misinformation and stale, baseless, and discredited allegations which have been examined and rejected by the Supreme Court of India.
The release of the report clearly betrays a blatant, nefarious motive to tarnish the Adani Group’s reputation with the main objective of damaging the upcoming follow-on public offering of Adani Enterprises, India’s largest FPO.”
The company said its investors were “not swayed by one-sided, biased and unsubstantiated reports with vested interests”. It said it always complies with all laws and maintains the highest standards of corporate governance.
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According to the Hindenburg report, the share price of the seven listed companies rose by an average of 819 percent over three years. It said 85 percent of these 7 companies had declined “on a purely fundamental basis due to sky-high valuations”.
Adani Group engaged in stock manipulation, and accounting fraud over decades:
Key Adani companies have taken on substantial debt, including “mortgaging their inflated stock shares for loans”, the report said. Five of the seven listed companies have a ‘current ratio’ below 1, indicating near-term liquidity pressure, it added.
The Hindenburg report also said the group had been the focus of four major government fraud investigations into allegations of money laundering, theft of taxpayer funds, and corruption, totaling an estimated $17 billion. Members of the Adani family also, it said, operate offshore shell companies in tax havens such as Mauritius, the United Arab Emirates, and the Caribbean islands. They created fraudulent import/export documents “to generate fake or illegal turnover and launder money from listed companies”.
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