Short seller accuses Gautam Adani of ‘largest con in corporate history’

Gautam Adani, the world’s third-richest man, is “the largest con in corporate history” through his India-based conglomerate Adani Group, according to scathing allegations published this week by influential short seller Hindenburg Research.

Hindenburg — whose previous targets have included electric-truck makers Nikola and Lordstown Motors — revealed in a research note late Tuesday it had taken a short position in Adani Group and alleged that Adani’s rise in wealth was fueled by a variety of illegal misdeeds.

“We have uncovered evidence of brazen accounting fraud, stock manipulation and money laundering at Adani, taking place over the course of decades,” Hindenburg said in the note.

Adani, 60, has amassed an estimated fortune of $125.5 billion while overseeing a sprawling network of companies with holdings across several industries, including control of major ports and airports, energy, real estate and cement.

As of Wednesday, he trailed only French luxury goods magnate Bernard Arnault and Tesla CEO Elon Musk in overall wealth, according to Forbes.

“Adani has pulled off this gargantuan feat with the help of enablers in government and a cottage industry of international companies that facilitate these activities,” the firm added.


Gautam Adani is chairman and founder of Adani Group.
AFP via Getty Images

The firm noted that Adani Group has “previously been the focus of 4 major government fraud investigations” alleging money laundering, corruption and theft of taxpayer money.

Hindenburg said it conducted a two-year investigation of the Adani business empire – with research that included dozens of interviews, including some with former company executives, as well as an analysis of internal documents and due diligence visits at company-controlled sites.

The report asserted that Adani, several family members and other company executives oversee a network of offshore shell companies located in tax havens across Mauritius, the United Arab Emirates, and the Caribbean.

Hindenberg alleged that some of the shell companies appeared to be hastily cobbled together, with websites “featuring only stock photos, naming no actual employees and listing the same set of nonsensical services.”


Adani Group
Hindenburg alleged that Adani Group has engaged in a sweeping fraud.
SOPA Images/LightRocket via Gett

Adani Group-affiliated public stocks lost a combined value equivalent to approximately $12 billion on Wednesday following the release of Hindenburg’s note, according to Bloomberg. However, the company affiliated firms have surged in value by more than $50 billion over the last year.

Adani Group CFO Jugeshindar Singh said the company was “shocked” by Hindenburg’s allegations and issued a firm denial.

“The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts,” Singh said.

“The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation,” Singh added.


Adani Group
Adani Group has holdings across various industries.
SOPA Images/LightRocket via Gett

Hindenburg alleged that many of the shell companies are reportedly operated by Adani’s older brother, Vinod, or his “close associates.”

“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,” Hindenburg said.

Hindenburg included a list of 88 questions about company operations which “we hope the Adani Group will be pleased to answer.”

“Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its 7 key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations,” Hindenburg said.


Hindenburg Research
Hindenburg Research is a prominent short-selling firm.

The short seller stressed that its report “represents our opinion and investigative commentary” and urged readers to draw their own conclusions about Adani Group.

A prominent activist investment firm, Hindenburg rose to national prominence after it published a report detailing malfeasance at the electric vehicle firm Nikola Corp. in 2020.

Hindenburg said Nikola had engaged in an “intricate fraud,” including an instance in which the company faked a video that appeared to show one of its electric trucks driving down a highway. In actuality, the company “simply filmed it rolling down the hill.”

Nikola founder Trevor Milton was later found guilty of securities fraud after Hindenburg’s allegations prompted an investigation.