Business as Usual

Hindenburg report has made it clear that Gautam Adani is the most blatant manifestation of crony capitalism - something that has become a norm in Modi’s India.

By Atif Shamim Syed | September 2023

Gautam Adani was India’s richest man at the beginning of this year. It took Nathan Anderson – a former ambulance driver – less than a week to cut him down to size.

The phenomenal rise of Gautam Adani – son of a small textile merchant in Gujrat – is almost in step with the rise of India’s Prime Minister Narendra Modi who also hails from the same state. In fact, many attribute Adani’s incredible ascent to a lifelong partnership between the two men. Through his conglomerate Adani aligned his own business interests with the political ambitions of Narendra Modi. The benefits of this association were tremendous for both– until Hindenburg came with its damning report.

Founded by Nathan Anderson in 2017, Hindenburg Research is an investment research firm based in New York that specializes in placing financial bets against over-valued companies or simply put - short selling. In January 2023, Hindenburg released a report of a two-year investigation into the Adani Group. It revealed that the conglomerate was involved in money laundering, accounting fraud and brazen stock manipulation. Hindenburg accused Adani of pulling the biggest con of corporate history with the help of enablers within the incumbent Indian government. The short seller further alleged that Adani companies were infested with debt, and enormously overvalued.

The report hit Adani like a bombshell. Investors panicked. Market reacted immediately registering steep decline in share prices of his companies. More than 100 billion dollars – around half of Gautam Adani’s personal wealth - evaporated within the first few days of the release of the Hindenburg report.

At first, Adani denied these accusations and tried to use the tried-and-tested formula of hiding behind pseudo-nationalism. The group stated that the Hindenburg report was an attack on India rather than an individual. A lengthy rebuttal was hastily published. However, as dust began to settle, people realized that India wasn’t under attack, and most of the accusations against Adani Companies did carry weight.
The on-going Adani episode has put a big question mark on the Securities and Exchange Board of India (SEBI), but the question is how Adani was able to dupe the regulator with such ease and impunity.

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