[As it appears, whether the Adani Group would eventually take any legal
action against the revelation made by the Hindenburg Research group -- as
had been threatened as a part of its very initial response -- is still
pretty much unclear.
What it has till now done and is still doing is to (i) try to restore
investors' confidence and (ii) mobilise Indian public opinion in its favour
-- perhaps in order to facilitate intervention by the Modi regime on its
side. (As of now, while, at least, Congress and Mahua Moitra of the TMC
have emphatically flagged the issue, the Indian government or the BJP --
or, for that matter, the SEBI or RBI -- yet remains silent.)]

Hindenburg Research

*Our Reply To Adani: Fraud Cannot Be Obfuscated By Nationalism Or A Bloated
Response That Ignores Every Key Allegation We Raised*

Published on January 29, 2023

On January 24th, we released a report outlining numerous issues of
suspected fraud at the Adani Group, the 2nd largest conglomerate in India
run by the world’s then-third richest man.

Hours ago, Adani released a ‘413-page response’. It opened with the
sensationalistic claim that we are the “Madoffs of Manhattan”. [1]

Adani also claimed we have committed a “flagrant breach of applicable
securities and foreign exchange laws.” Despite Adani’s failure to identify
any such laws, this is another serious accusation that we categorically

It also predictably tried to lead the focus away from substantive issues
and instead stoked a nationalist narrative, claiming our report amounted to
a “calculated attack on India.” In short, the Adani Group has attempted to
conflate its meteoric rise and the wealth of its Chairman, Gautam Adani,
with the success of India itself.

We disagree. To be clear, we believe India is a vibrant democracy and an
emerging superpower with an exciting future. We also believe India’s future
is being held back by the Adani Group, which has draped itself in the
Indian flag while systematically looting the nation.

We also believe that fraud is fraud, even when it’s perpetrated by one of
the wealthiest individuals in the world.

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

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.

(Source: Page 24 of Adani’s response, before addressing our questions,
which describes its initiative to produce safe to eat vegetables)

Adani Failed To Specifically Answer 62 of Our 88 Questions

Of The Questions It Did Answer, The Group Largely Confirmed Or Attempted to
Sidestep Our Findings

Our report asked 88 specific questions of the Adani Group. In its response,
Adani failed to specifically answer 62 of them. Instead, it mainly grouped
questions together in categories and provided generalized deflections.

In other instances, Adani simply pointed to its own filings and declared
the questions or relevant matters settled, again failing to substantively
address the issues raised.

Of the few questions it did answer, its responses largely confirmed our
findings, as we detail.

But before we get into those, we note that the core allegations of our
report – focused on numerous suspect transactions with offshore entities –
were left completely unaddressed.

Our Report Alleged That Adani Group Has Engaged In Billions of U.S. Dollars
In Suspicious Dealings With Its Chairman’s Brother, Vinod Adani, And His
Labyrinth of Offshore Shell Entities

These Dealings Raised Serious Questions About Stock And Accounting
Adani’s Defense: Vinod Adani, Brother To The Chairman, Is Not A Related
Party To The Group And There Are No Disclosable Conflicts Relating To This
Web Of Opaque Transactions

Our report detailed a vast labyrinth of offshore shell entities directed by
or associated with Vinod Adani, the older brother of Chairman Gautam Adani.
These entities included 38 entities in Mauritius, along with others in the
UAE, Cyprus, Singapore, and various Caribbean islands.

We presented extensive evidence that these entities have been used for (1)
stock parking / stock manipulation (2) or engineering Adani’s accounting.

Many of our questions were focused on both the nature of these transactions
and the lack of disclosure around the clear conflicts of interest involved.

In its response, Adani did not seem to dispute the existence of these
transactions and made no effort to explain their obvious irregularities.

Instead, Adani bizarrely argued that Vinod Adani is not a related party to
the Adani Group, and that there are no disclosable conflicts relating to
the transactions that have collectively moved billions of U.S. dollars
through Adani Group entities, largely through offshore shell entities.

We Asked About The Source of The Billions Of U.S. Dollars That Have Flowed
>From Vinod Adani-Associated Offshore Shell Entities Through The Adani Group
Adani’s Defense: “We Are Neither Aware Nor Required To Be Aware Of Their
‘Source Of Funds’”
Example #1: A U.S. ~$253 Million Loan From a Mauritius Entity Where Vinod
Adani Serves As a Director
Example #2: An Investment Of U.S. $692.5 Million From A Mauritius Entity
Controlled By The Head Of The Adani Group’s Private Family Investment Office
Beyond the requirements to disclose related party dealings, many of our
questions focused on the source of funds for suspect transactions between
Adani Group entities and Vinod Adani-associated entities. This information
is critical to the integrity of Adani’s business, as it indicates whether
the company is round-tripping turnover, laundering illicit funds, or using
cash to manipulate its stock.

We found Adani’s lack of direct and transparent answers to these questions

For example, we asked a series of questions about transactions emanating
from entities where Vinod Adani or the head of the Adani Group Family
Investment Office served as directors.

Adani’s response claimed ignorance, stating “We are neither aware nor
required to be aware of their ‘source of funds’” [Pg. 35]. It also added
that it is “not in a position to comment on…allegations on the business
dealings and transactions of Mr. Vinod Adani.” [Pg. 41]

In other words, we are expected to believe that Gautam Adani has no idea
why his brother Vinod lent massive sums of money to Adani entities, and no
idea where the money originated from.

If any of that were true, Gautam could easily clear up the mystery by
calling his brother, or asking him at the next family dinner, why he has
been directing billions of dollars to Adani-controlled entities through a
network of opaque offshore shell entities. He could also call the head of
his own Family Investment Office and ask the same.

Once again, these explanations simply defy common sense.

Our Report Outlined Numerous Irregularities And Connections Between
Suspected Offshore Stock Parking Entities And Adani Promoters, Raising Key
Questions About Whether Promoter Holdings Were Fully Disclosed
Adani’s Response Claimed It Simply Doesn’t Know Who Its Largest Public
Holders Are
A large portion of our report was dedicated to outlining a web of opaque
offshore entities, often with connections to Vinod Adani, that seemed to
hold nothing but billions of U.S. dollars worth of stock in Adani listed

As a reminder, here are several examples of suspect Mauritius-based
entities with large, concentrated holdings in Adani stock:
(Source: *Disclosures as per Trendlyne, BSE : 1, 2, 3, 4, 5, **No other
holding visible in listed equities)

In one example, we showed how an entity that had been an Adani related
party made a major investment into one of the suspect offshore holders,
drawing a clear line between the Adani Group and the suspected stock
parking entities.

We also showed how several of the suspected stock parking entities had been
formed with the help of Amicorp, which was involved in one of the most
notorious international fraud and money laundering scandals in history, the
1MDB scandal.

Specifically, regarding the company’s use of Amicorp, which formed at least
7 Adani promoter entities, at least 17 offshore shells and entities
associated with Vinod Adani, and at least 3 Mauritius-based offshore
shareholders of Adani stock, Adani said it was “not concerned” about the
company’s previous scandals, like the 1MDB fraud.

Further, we showed that the suspected stock parking entities engaged in
wildly irregular trading, accounting for up to 30%-47% of delivery volume,
essentially cornering the market in Adani shares.

In its response, Adani once again claimed complete ignorance as to its
largest public holders and their trading patterns:

“Each of the entities referenced in queries above are public shareholders
in the listed companies in the Adani Portfolio…we cannot comment on trading
pattern or behavior of public shareholders.” [Pg. 47-48]

On Adani’s Legal Technicality Defense: It Strikes Us As Obvious That Vinod
Adani Is A Related Party To The Adani Group
Adani focuses its argument on contesting the legal definition of ‘related
party’ in India, claiming:
“Any mere close or business relationship of any promoter entity or their
relatives does not make a transaction a related party transaction.” [Pg. 32]

Indian Accounting Standards specifically explain how the brother of an
individual “may be expected to influence, or be influenced by” the
individual for purposes of determining related party transactions.
(Source: The Indian Ministry of Corporate Affairs [Pg. 3])

By comparison, the Financial Accounting Standards Board (FASB) –
recognizing the dangers of related party transactions for investors –
simply says that “[m]anagement of the entity and members of their immediate
families” are related parties.

We believe investors should regard Vinod Adani as a related party under
either definition based on his (i) familial relationship with the Chairman
and much of the senior management of the Adani Group (ii) his suspected
significant undisclosed ownership of shares in Adani Group companies; (iii)
his historical presence on the board of various Adani Group companies; and
(iv) his extensive and irregular transactions with Adani.

In short, these transactions bear all the same potential risks and issues
of any other related party transaction: non-arms-length transactions,
corruption, conflicts of interest, stock manipulation and fraud – yet Adani
claims investors are not entitled to know.

Of The Questions Adani Answered, They Largely Confirmed Our Findings,
Argued Points We Didn’t Raise Or Sidestepped The Key Issues Altogether
Here we list several examples of responses that simply failed to address
the questions we asked.

1. Our report included documentation from a 2007 SEBI ruling declaring that
Adani promoters had aided and abetted infamous market manipulator Ketan
Parekh in his manipulation of shares of AEL, the predecessor entity to
Adani Enterprises. Per the SEBI ruling:

“The charges leveled against promoters of Adani that they aided and abetted
Ketan Parekh entities in manipulating the scrip of Adani stand proved”.
[Pg. 4] [Pg. 46]

We specifically asked, “How does Adani explain this coordinated, systematic
stock manipulation in its shares, together with one of India’s most
notorious convicted stock fraudsters?”

Adani responded by simply declaring the question to be “incorrect” without
explanation, adding that the matter had earlier been settled.

2. Our report included evidence showing that SEBI investigated and
prosecuted more than 70 entities and individuals, including Adani
promoters, for manipulating Adani stock between 1999 to 2005. We asked for
an explanation as to why Adani’s listed companies so regularly seem to be
the subject of market manipulation investigations and prosecutions.

Adani’s response once again claimed it was not “aware of, nor are we
required to be, aware of any proceedings against these other ‘entities and
individuals’”. [Pg. 29]

We find it hard to fathom that Adani is completely unaware of the repeated
allegations and prosecutions associated with the manipulation of its stock.
This is especially the case considering the irregular and outsized
performance of its listed companies relative to benchmarks and peers.

3. Our report included a question relating to Adani’s statement to
regulators, claiming that Vinod Adani was (emphasis added) “not at all
having any involvement in any Adani Group of companies”.

The question, which parallels issues that continue to this day, centered
around whether the Adani Group had been forthright to the government about
its dealings with Vinod Adani.

Adani’s response seemed to indirectly confirm that its statements to
regulators were in fact false, adding qualifying language claiming that
Vinod was not involved in “relevant” entities associated with the
investigation, as opposed to the “any” it had claimed when asked by
regulators (emphasis added):

“…the over-invoicing allegations for power imports pertains to the period
between April 2010 till August 2014, during which period Mr. Vinod Adani
was not even a director in any of the relevant Adani entities against whom
such investigations were initiated”. [Pg. 29]

In reality, Vinod Adani was a director of Adani Group companies. Vinod
Adani stepped down from Adani Global Pte in August 2010, Adani Shipping in
April 2011 and Adani Power Pte in April 2011, according to Singaporean
Corporate Filings. [Pg. 2, Pg. 3] This was during the period under

In short, it seems the Adani Group flagrantly misled government officials
on one of the most important issues our report raised: its relationship
with Vinod Adani.

4. We noted that listed Adani companies have paid INR 63 billion to private
contractor PMC Projects over the past 12 years. We noted that the entity is
controlled by the son of a close associate of Vinod Adani. We included
Taiwanese media reports showing that the same individual controlling the
entity is “Adani Group’s Taiwan representative”. We found pictures of him
literally holding an Adani sign at an official government event, where he
represented Adani.

Despite the controller of PMC projects clearly being an Adani
representative, we found no related party disclosures about the massive
payments to PMC Projects, which siphoned cash out of listed companies.

Adani simply didn’t respond to these questions, instead referring to
documents from an earlier DRI investigation.

5. Our report showed that Mauritius shareholders had effectively bailed out
Adani Green Energy and helped it avoid delisting by participating in 2
offer for sale (OFS) deals. We had asked Adani Group to detail the entities
involved in these transactions by providing data from its weekly
shareholding patterns. These patterns are available (although not publicly
disclosed) for many corporates in India.

Rather than address this request, Adani simply regurgitated our analysis
which indicates that offshore suspected stock parking entities did in fact
participate in the deals.

This reinforces what we viewed as an almost statistical certainty: that the
suspected stock parking entities participated in the deal and helped Adani
Green avert a likely delisting.

We also note that the recent Follow On Public Offer (FPO) in Adani
Enterprises contains many of the same type of Mauritius funds that we
pointed out as likely being in clear violation of SEBI regulations.

For example, the anchor list of Adani Enterprises investors contains a host
of suspect Mauritius funds. These include: (1) Ayushmat Limited (2) Coeus
Global Opportunities Fund (3) Great International Tusker Fund and (4)
Aviator Global Investment.

6. The Adani Group has not even attempted to clarify its relationship with
a Chinese National (Chang Chung-Ling), despite a plethora of linkages. We
had asked: What is the nature of Chang Chung-Ling’s relationship with the
Adani Group, including his relationship with Vinod Adani?

This is an important matter, not only for shareholders but also India’s
national interest because:

An entity (Gudami International) run by Chang Chung Ling (aka Lingo Chang)
was said to have been part of a massive corruption scheme in the Augusta
Westland Scandal, one of India’s largest and ongoing bribery scandals.
The son of Chang Chung Ling is the beneficial owner of the major contractor
to the Adani Group called PMC Projects, mentioned above.
(Note: We will continue to update this list of issues over the course of
the next several days as we scrutinize Adani’s response closer and continue
our ongoing due diligence on the company.)

Conclusion: Adani’s Response Largely Confirmed Our Findings And Ignored Our
Key Questions
Disclosure: We Are Short Adani Group Through U.S.-Traded Bonds And
Non-Indian-Traded Derivative Instruments
Legal Disclaimer

We hold short positions in Adani Group Companies through U.S.-traded bonds
and non-Indian-traded derivatives, along with other non-Indian-traded
reference securities. This report relates solely to the valuation of
securities traded outside of India. This report does not constitute a
recommendation on securities. This report represents our opinion and
investigative commentary and we encourage every reader to do their own due
diligence. Use of Hindenburg Research’s research is at your own risk. In no
event should Hindenburg Research or any affiliated party be liable for any
direct or indirect trading losses caused by any information in this report.
You further agree to do your own research and due diligence, consult your
own financial, legal, and tax advisors before making any investment
decision with respect to transacting in any securities covered herein. You
should assume that as of the publication date of any short-biased report or
letter, Hindenburg Research (possibly along with or through our members,
partners, affiliates, employees, and/or consultants) along with our clients
and/or investors has a short position in all stocks or bonds (and/or
derivatives of the stock) covered herein, and therefore stands to realize
significant gains in the event that the price of any security covered
herein declines. Following publication of any report or letter, we intend
to continue transacting in the securities covered herein, and we may be
long, short, or neutral at any time hereafter regardless of our initial
conclusions, or opinions. This is not an offer to sell or a solicitation of
an offer to buy any security, nor shall any security be offered or sold to
any person, in any jurisdiction in which such offer would be unlawful under
the securities laws of such jurisdiction. Hindenburg Research is not
registered as an investment advisor in the United States or have similar
registration in any other jurisdiction. To the best of our ability and
belief, all information contained herein is accurate and reliable, and has
been obtained from public sources we believe to be accurate and reliable,
and who are not insiders or connected persons of the stock covered herein
or who may otherwise owe any fiduciary duty or duty of confidentiality to
the issuer. However, such information is presented “as is,” without
warranty of any kind – whether express or implied. Hindenburg Research
makes no representation, express or implied, as to the accuracy,
timeliness, or completeness of any such information or with regard to the
results to be obtained from its use. All expressions of opinion are subject
to change without notice, and Hindenburg Research does not undertake to
update or supplement this report or any of the information contained herein.

[1] Adani seems unaware that Madoff lived in Manhattan, so he was quite
literally his own Madoff of Manhattan.

[Excerpted from: <


*Adani claims US investment firm’s fraud allegations are an ‘attack on

Conglomerate responds to Hindenburg Research report that claimed it was the
‘biggest con in corporate history’

Jonathan Barrett
Sun 29 Jan 2023 22.34 EST

Adani Group has published a 413-page rebuttal of fraud allegations by
Hindenburg Research, likening the US investment firm’s report to an attack
on India amid mounting financial pressure on the coal conglomerate.

The lengthy response seeks to soothe investor concerns and stir nationalist
fervour as Adani attempts to complete a US$2.5bn share sale, one of India’s
largest ever fundraising campaigns, designed to finance capital expenditure
and reduce debt.

“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,” the Adani
response said.

Sign up for Guardian Australia’s free morning and afternoon email
newsletters for your daily news roundup
“The allegations and insinuations, which were presented as fact, spread
like fire, wiping off a large amount of investor wealth and netting a
profit for Hindenburg. The net result is that public investors lose and
Hindenburg makes a windfall gain.”

Adani’s response (PDF) was published several hours before the Indian
markets reopened on Monday, after a near US$50bn plunge in the overall
value of the conglomerate’s entities in wild trading last week.

Hindenburg’s report claimed that the Adani empire was the “biggest con in
corporate history” engaged in a “brazen stock manipulation and accounting
fraud scheme”. It also accused Adani of loading companies with debt that
has put the entire group on a “precarious financial footing”.

The US company cited a series of transactions tied to Adani’s Carmichael
mine and rail operations in Queensland that it alleged may have allowed
Adani to avoid disclosing to investors that some of the Australian assets
had lost value – a charge the Indian conglomerate disputes.

‘It was a set-up, we were fooled’: the coal mine that ate an Indian village
Adani said in its published response that the transactions were compliant
and at arm’s length terms.

The short seller’s allegations have wiped billions of dollars of value from
the sprawling empire of Gautam Adani, who was the world’s third-richest man
until more than US$22bn was erased from his personal net worth in the
fallout from the report. The Indian industrialist is now the world’s
seventh-richest, according to Forbes.

The issue has weighed on the broader Indian market, denting otherwise
strong recent returns for emerging markets.

Hindenburg disclosed it took a short position in Adani companies before it
published its report. Activist funds like Hindenburg use financial
instruments to profit from falling share prices in the companies they
target, which they believe are heavily overvalued and have poor or
fraudulent business practices.

Named after the 1937 airship disaster, Hindenburg looks for stocks that
could crash.

Adani’s lengthy statement contains responses to questions raised by
Hindenburg, as well as supporting documents such as court rulings and
extracts from company reports.

The response also questions the motives, transparency and legality of the
Nate Anderson-founded activist fund.

Hindenburg has been contacted for comment.

Notably for investors, Adani said the amount of borrowed money its
companies use are healthy and in line with industry benchmarks.

Adani accused the US company of having contempt for Indian regulators and
the judiciary by highlighting old allegations that Adani said had since
been “judicially determined to be false”.

This included allegations that Samir Vora, the executive director of Adani
Australia, was a key figure in a diamond trading scam designed to defraud
the Indian government. The matter was closed and dismissed, Adani said.

The high stakes tit-for-tat came after Hindenburg dared Adani to take it to
court given it would open the coal conglomerate to further scrutiny.

Battles between large companies and short sellers can take months to play
out, resulting in sustained financial pressure and curbs on a company’s
ability to raise funds.

The Greens’ federal industry spokesperson, Penny Allman-Payne, has said the
Hindenburg report should prompt Queensland’s Labor government to question
whether Adani should operate in Australia.

Located in Queensland’s coal-rich Galilee Basin, the Adani project exported
its first coal in late 2021, drawing widespread opposition due to the
fossil fuel’s significant contribution to greenhouse gas emissions.


---------- Forwarded message ---------
From: Sukla Sen <sukla....@gmail.com>
Date: Sun, Jan 29, 2023, 06:12
Subject: Unexpected Twist in Adani Story (of Rise and Rise)
To: foil-l <foi...@insaf.net>, Say NO 2 UID Core Group <

>From 2014 to (September) 2022 -- over (approx.) eight years of Modi rule at
the Centre the wealth of Adani grew twentyfold. Over roughly the same
period the Ambani group -- the second-most favoured one -- grew about 4.75
times. Indian GDP grew 1.25 times.

Now some -- almost sudden -- interesting developments, in broadly
chronological order.
Unexpected Twist in Adani Story (of Rise and Rise)*

I. * On Jan. 24, Hindenburg Research group -- an investment research firm
based in NYC -- came out with a report that claimed:
Today we reveal the findings of our 2-year investigation, presenting
evidence that the INR 17.8 trillion (U.S. $218 billion) Indian conglomerate
Adani Group has engaged in a brazen stock manipulation and accounting fraud
scheme over the course of decades.
* Gautam Adani, Founder and Chairman of the Adani Group, has amassed a net
worth of roughly $120 billion, adding over $100 billion in the past 3 years
largely through stock price appreciation in the group’s 7 key listed
companies, which have spiked an average of 819% in that period.
(Ref.: <https://pdffile.co.in/hindenburg-research-adani-report/> and <

II. It immediately triggers a sharp slide in the value of Adani group
AA. <
BB. <
CC. <
Also relevant: DD. <

III. Adani threatens Hindenburg with legal action:

IV. Hindenburg hits back: <

V. Congress flags the serious implications for the people of India and
demands probe: <

VI. An interesting comment: <

VII. Evidently, the modality by which the GVK group was brought to its
knees and made to sell the Mumbai airport to Adani for a song cannot be
deployed in the instant case.
That has made things too tricky for the Adani group.

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