Hindenburg Vs Adani: Inside The Report That Sucked Over ₹48,000Cr Off Adani's Pocket Ahead Of India's Largest FPO

January 27,2023

All hell broke loose on Adani group's stock platter after Hindenburg Research made massive allegations of stock manipulation against the world's third richest man Gautam Adani and his business empire. The share price of Adani Ports and Special Economic Zone Ltd fell up to 7.25 per cent and that of Adani Enterprises fell up to 3.7 per cent yesterday.

Hindenburg Research report titled "Adani Group: How The World's 3rd Richest Man Is Pulling The Largest Con In Corporate History" was published on 24 January 2023 and the team shared it on Twitter on 25 January 2023.


Hindenburg Research was founded in 2017 by Nathan Anderson. It is a forensic financial research firm that analyses equity, credit, and derivatives. Hindenburg, on its website, says it looks for "man-made disasters," such as accounting irregularities, mismanagement, and undisclosed related-party transactions. The company invests its own capital. Hindenburg has flagged potential wrongdoing in at least 16 companies since 2017, according to its website.


Hindenburg Research has alleged that, "Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades".

The short-seller says its research, "involved speaking with dozens of individuals, including former senior executives of the Adani Group, reviewing thousands of documents, and conducting diligence site visits in almost half a dozen countries". The research report further goes on to say that even if the findings of this investigation are ignored, by taking the financials of Adani Group at face value, one will realise its 7 key listed companies have 85 per cent downside purely on a fundamental basis owing to sky-high valuations.

While quoting a former Adani Group executive who described the conglomerate as a "family run business", Hindenburg says 5 of 7 key listed Adani Group companies have reported 'current ratios' below 1, indicating near-time liquidity pressure. The report adds that Adani Group has previously been the focus of 4 major government fraud investigations that includes money laundering, theft of taxpayer funds and corruption, totaling to estimated $1.7 billion.

"Adani family members allegedly cooperated to create offshore shell entities in tax-haven jurisdictions like Mauritius, the UAE, and Caribbean Islands, generating forged import/export documentation in an apparent effort to generate fake or illegitimate turnover and to siphon money from the listed companies," the report said. In an apparent attempt to justify its allegations, Hindenburg Report went on to point out several previous allegations against Gautam Adani's brothers, Rajesh Adani and Vinod Adani and his brother-in-law Samir Vora.

In the report, Vinod Adani, Gautam Adani's elder brother has been termed as an "elusive figure", who has "regularly been found at the center of the government's investigations into Adani for his alleged role in managing a network of offshore entities used to facilitate fraud."

"Our research, which included downloading and cataloguing the entire Mauritius corporate registry, has uncovered that Vinod Adani, through several close associates, manages a vast labyrinth of offshore shell entities.

We have identified 38 Mauritius shell entities controlled by Vinod Adani or close associates. We have identified entities that are also surreptitiously controlled by Vinod Adani in Cyprus, the UAE, Singapore, and several Caribbean Islands.

Many of the Vinod Adani-associated entities have no obvious signs of operations, including no reported employees, no independent addresses or phone numbers and no meaningful online presence. Despite this, they have collectively moved billions of dollars into Indian Adani publicly listed and private entities, often without required disclosure of the related party nature of the deals.

We have also uncovered rudimentary efforts seemingly designed to mask the nature of some of the shell entities. For example, 13 websites were created for Vinod Adani-associated entities; many were suspiciously formed on the same days, featuring only stock photos, naming no actual employees and listing the same set of nonsensical services, such as "consumption abroad" and "commercial presence".

The Vinod-Adani shells seem to serve several functions, including (1) stock parking / stock manipulation (2) and laundering money through Adani's private companies onto the listed companies' balance sheets in order to maintain the appearance of financial health and solvency," said the report.

Citing the rules for listed companies in India that require all promoter holdings to be disclosed, and also have at least 25 per cent of the float held by non-promoters in order to mitigate manipulation and insider trading, the Hindenburg Research report suggests that, "4 of Adani's listed companies are on the brink of the delisting threshold due to high promoter ownership". It says that offshore shells and funds tied to the Adani Group comprise of the largest public (non-promoter) holders of Adani stock, and that issue would be subjected to Adani companies' delisting if SEBI rules are enforced.

As per Hindenburg, the Right to Information (RTI) requests it filed with SEBI confirm that the offshore funds (of Adani Group) are subjects of an ongoing investigation. Hindenburg further goes on to quote a former trader for Elara, an offshore fund with almost $3 billion in concentrated holdings of Adani shares, who said "it is obvious that Adani controls the shares", also adding that the funds are "intentionally structured to conceal their ultimate beneficial ownership."

Hindenburg Research report cites another firm called Monterosa Investment Holdings controls 5 supposedly independent funds that collectively hold over INR 360 billion (U.S. $4.5 billion) in shares of listed Adani companies, according to Legal Entity Identifier (LEI) data and Indian exchange data.

"Monterosa's Chairman and CEO served as director in 3 companies alongside a fugitive diamond merchant who allegedly stole U.S. $1 billion before fleeing India. Vinod Adani's daughter married the fugitive diamond merchant's son.

A once-related party entity of Adani invested heavily in one of the Monterosa funds that allocated to Adani Enterprises and Adani Power, according to corporate records, drawing a clear line between the Adani Group and the suspect offshore funds", said the report.

The report further mentions New Leaina Investments, another Cyprus-based entity which, until June-September 2021 owned over $420 million in Adani Green Energy shares, comprising approximately 95 per cent of its portfolio. As per the report, the parliamentary records show it was (and may still be) a shareholder of other Adani listed entities.

"New Leaina is operated by incorporation services firm Amicorp, which has worked extensively to aid Adani in developing its offshore entity network. Amicorp 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.

Amicorp played a key role in the 1MDB international fraud scandal that resulted in U.S. $4.5 billion being siphoned from Malaysian taxpayers. Amicorp established 'investment funds' for the key perpetrators that were "simply a way to wash a client's money through what looked like a mutual fund", according to the book Billion Dollar Whale, which reported on the scandal," said Hindenburg Research.

As per Hindenburg analysis, offshore suspected stock parking entities accounted for 30 - 47 per cent of yearly delivery volume in several Adani listed companies, which it calls a "flagrant irregularity indicating that Adani stocks have likely been subject to 'wash trading' or other forms of manipulative trading via the suspect offshore entities". Delivery volume is a unique daily data point that reports institutional investment flows.

"Evidence of stock manipulation in Adani listed companies shouldn't come as a surprise. SEBI has investigated and prosecuted more than 70 entities and individuals over the years, including Adani promoters, for pumping Adani Enterprises' stock," said the report.


Adani Group legal head, Jatin Jalundhwala, in a statement to the exchanges called Hindenburg Research's report 'baseless'. It said the research group is "maliciously mischievous, (and) unresearched".

"We are evaluating the relevant provisions under U.S. and Indian laws for remedial and punitive action against Hindenburg Research," the statement said.

The report has "adversely affected the Adani Group, our shareholders and investors. The volatility in Indian stock markets created by the report is of great concern," it added.

The Hindenburg report comes ahead of a $2.5billion Follow on Public Offering (FPO) by the flagship firm Adani Enterprises. Adani's Group CFO Jugeshinder Singh said in a statement that timing of the report's publication "betrays a brazen, mala fide intention to undermine the Adani Group's reputation". He also accused that the principal objective of the report was to damage the "upcoming Follow-on Public Offering from Adani Enterprises, the biggest FPO ever in India".

"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," said Jugeshinder Singh.