Can ‘survivor’s instinct’ help India’s Gautam Adani ride out Hindenburg fraud report?

Hindenburg Research accused the Adani Group of accounting fraud, share-price manipulation and money-laundering, claims the conglomerate rejects as ‘baseless’

Founder Gautam Adani’s ability to ‘manage uncertainties and turbulence’ will be tested in the weeks ahead as the report hits his fortunes

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Chairperson of Indian conglomerate Adani Group, Gautam Adani, speaks at the World Congress of Accountants in Mumbai on November 22, 2022. Photo: AFP/File

Published: 8:30am, 31 Jan 2023Updated: 8:33am, 31 Jan 2023

India’s infrastructure king Gautam Adani has known tense moments in his dramatic rise to become Asia’s richest man. But nothing compares to the current challenge he faces, with a US hedge fund accusing his namesake ports-to-energy empire of pulling “the largest con in corporate history” through accounting fraud, share-price manipulation and money-laundering.

In a 413-page rebuttal, the Adani Group rejected Hindenburg’s charges as “baseless” and – wrapping itself in the Indian flag – called them a “calculated attack” on India’s growth story. “Fraud cannot be obfuscated by nationalism,” Hindenburg replied Monday.

In three days of trading, the accusations have wiped nearly US$72 billion from the group companies’ market value, according to Bloomberg, badly eroding Adani’s own fortune in the process. A US$2.5-billion share sale by the conglomerate due to close on Tuesday was just two per cent subscribed.

Adani, who last year was briefly the world’s second-richest person with a fortune of US$146.9 billion, has slipped to seventh with US$96.6 billion, Forbes says. Adani is the biggest target yet for six-year-old Hindenburg, a US-based short-seller, which has a feared Wall Street reputation for pursuing firms over alleged wrongdoing.

While the Adani Group has been under scrutiny before over opaque transactions, hefty debt and sky-high market valuations, Hindenburg’s blistering allegations could potentially prove the most damaging.