Hindenburg verses Adani

Hindenburg Investigation is a New York based entity which focuses on forensic financial research. It has decades of experience in the investment management sector, historically specialising in equities, credit, and derivatives analysis. While it employs fundamental analysis to help make financial decisions, it’s most useful research comes from finding uncommon sources of information that are difficult to obtain.
Hindenburg Investigation report with the title, ‘Adani Group: How the World’s 3rd Richest Man is pulling the Largest Con in Corporate history’ appeared on January 23 and kicked up a storm in corporate India. Meanwhile Adani group and its affiliated entities lost almost $12 billion within 48 hours of publishing of the report. Although Adani group tweeted that they are considering legal action against Hindenburg, the entity replied that they will be more than happy if Adani takes them to courts, as they have solid evidence against him and his conglomerate.
The report is based on two-years research and provides proof that the Indian conglomerate Adani Group, worth $218 billion, participated in blatant accounting fraud and stock manipulation over a long period of time. Adani has a net worth of about $120 billion, which he has increased by over $100 billion in the last three years primarily as a result of stock price growth in the group’s seven most important publicly traded companies, which have increased by an average of 819% during that time.
Four significant government fraud investigations, totaling an estimated $17 billion in money laundering, theft of taxpayer cash, and corruption allegations, have previously focused on the Adani Group. Members of the Adani family are accused of working together to set up offshore shell companies in tax haven nations like Mauritius, the UAE, and the Caribbean Islands and fabricating import and export paperwork in an apparent effort to generate fictitious or fraudulent turnover.
Rajesh Adani, the younger brother of Gautam Adani, was charged by the Directorate of Revenue Intelligence (DRI) of being a key player in a 2004–2005 diamond trade import. Vinod Adani, the older brother of Gautam Adani, had a 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.
38 shell companies in Mauritius that Vinod Adani controls have been found. Other located organisations that Vinod Adani also covertly controls are in Singapore, the UAE, Cyprus, and a number of Caribbean Islands. Many of the companies connected to Vinod Adani don’t appear to be in operation; they don’t have any workers listed, no independent addresses or phone numbers, and no discernible web presence.
Crude attempts were made to disguise the true nature of some of the shell entities. For instance, 13 websites were made for companies connected to Vinod Adani; many of them appeared to have been set up on the same days, contained just stock photographs, listed no actual workers, and offered the same assortment of absurd services, including “consumption overseas” and “commercial presence.”
According to Legal Entity Identifier (LEI) data and Indian exchange data, another company called Monterosa Investment Holdings is in charge of 5 ostensibly independent funds that possess more than $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. Daughter of Vinod Adani wedded fugitive diamond merchant’s son.
The blatant accounting discrepancies and dubious activities of the Adani Group appear to be made possible by almost nonexistent financial controls. The Chief Financial Officer position has experienced consistent change in listed Adani companies. For instance, the fact that Adani Enterprises has employed 5 chief financial officers in the past 8 years is a major cautionary sign of possible accounting problems.
Journalists are increasingly being imprisoned or even killed for criticising India’s wealthy business people and politicians. Analysts on the stock market have been detained for writing unfavorable articles about firms. Corporate wrongdoing has mainly gone unpunished in this environment of restrained discourse.
The report considers the Adani story as one of history’s most heinous cases of corporate deception in this study. Hindenburg has discovered proof of decades-long, blatant accounting fraud, stock manipulation, and money laundering by Adani Group. Adani has accomplished this enormous task with the aid of government enablers and a cottage industry of foreign businesses that support these activities.
Multiple tiers of government are affected by these corruption problems. Numerous sources contacted by Hindenburg claim that SEBI, the Indian securities regulator, is more likely to shield the offenders than to hold them accountable.
What can Pakistan do after disclosure of Hindenburg Report with substantial evidence?
The main question to be asked is why FATAF is blinded about Indian tycoons, tax frauds, exploitation of tax heavens, malpractices in International trade and stocks which has affected millions of Indians and non-Indians across the globe. There is also need to debate the dubious role of corporate India in building a false image of people like Adani, and, is entire Corporate India a bubble, about to burst.
Our inward looking media does not take notice of such brazen frauds by Corporate India, while Indian media leaves no stone unturned to malign and bash Pakistan as a hub of terror and money laundering. The Hindenburg report may just be tip of the iceberg; further investigations may disclose that corporate India is sitting on a powder keg of money laundering and fraud which could burst any time.

Adeela Naureen and Waqar K Kauravi

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