The whole world knows that Gautam Adani’s growth during the past nine years has been unimaginable. His sudden growth has been a “mystery”. Now this mystery has been unfolded by Hindenburg Research. In Tamil there is a saying: “Pala naal thirudan, oru naal agapaduvaan” which means “a thief who steals regularly for a long time will be caught one day”. 

The report has fired back at Adani Group, saying that the Indian conglomerate has been "systematically looting the nation" despite claiming to act in the country's best interests. "The Adani Group has attempted to conflate its meteoric rise and the wealth of its chairman, Gautam Adani, with the success of India itself," Hindenburg said. The report further says, "To be clear, we believe India is a vibrant democracy and an emerging superpower with an exciting future. We also believe India's future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation. The Indian group had engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades."

Hindenburg said its report was based on two years of investigation. Since the release of the report, the Adani Group has rejected Hindenburg's claims. The US-based financial research firm has rebutted the 413-page Adani’s response to its report. It sticks to its stand that the Adani Group has given vague answers to 68 of the 88 questions that it raised.

Due to the report by the New York firm, Adani Group lost more than USD 50 billion in market value in just two trading sessions and it continues to lose over USD 20 billion, or about one-fifth of his total fortune. Between January 24 and January 31 there has been a steep decline in Adani Group Shares. The change in Adani Total Gas is minus 46%; Adani Enterprises is minus14%; Adani Transmission is minus 36%; Adani Green Energy is minus 36%; Adani Ports & SEZ is minus 19%; Adani Power is minus 19%; Ambuja Cements is minus 20%; Adani Wilmar is minus 19%; ACC is minus 15%; and NDTV is minus 13%.    

“Obviously, this is panic-selling,” JM Financials equity research chief Ashish Chaturmohta told AFP, adding that traders were creating new short-sell positions to protect earlier bullish bets on Adani stocks. Hindenburg Research said in its report that Adani Group had used undisclosed related-party transactions and earnings manipulation to “maintain the appearance of financial health and solvency” of its listed business units.

Adani Group dismissed the report as baseless and that it was the victim of a “maliciously mischievous” reputational attack by Hindenburg. Legal chief Jatin Jalundhwala said Adani was exploring taking legal action against the New York-based research advisory in the US and Indian courts.

Hindenburg responded that Adani had ducked the issues its research had raised and instead resorted to “bluster and threats”. “If Adani is serious, it should also file suit in the US,” the firm said in a statement. “We have a long list of documents we would demand in a legal discovery process.”

The report said a pattern of “government leniency towards the group” stretching back decades had left investors, journalists, citizens and politicians unwilling to challenge the group’s conduct “for fear of reprisal”.

“The signal is that because the Adani brothers are very close to the powers that be today, therefore nobody would challenge them,” said Economist Arun Kumar. “Those who earlier criticised Adani, those who tried to do some investigation, Adani group launched legal cases against them, so they have scared off a lot of people,” he added.

Adani had a humble beginning. Born to a textile merchant in the western state of Gujarat, Adani spent his early career as a small-time plastics trader who travelled by scooter. His big break came after India began liberalizing its economy in the early 1990s, and he was tasked with developing a deep-water port at Mundra, which now hosts the largest commercial port in the country. From there, his company expanded swiftly into infrastructure, logistics and energy, with coal-related businesses fuelling his rise.

Adani’s net worth has grown rapidly, from $9 billion in 2020 to $127 billion in December 2022, during a broader boom in Indian capital markets. Coal remains at the heart of his empire, and he is the largest private developer of coal power plants and mines in the world, according to Global Energy Monitor. More than 60 percent of his holding company’s revenue was derived from coal-related business, The Washington Post reported in December 2022.

It is an open secret that Modi-Shah duo has been “extraordinarily generous” to Adani in giving him the profit-yielding public companies. It is said that Adani was somewhere between 600 and 700 in the list of world’s rich people in 2000. It is only during the past nine years he has suddenly grown and reached the third position and the main credit goes to Modi-Shah. Now he is pushed to the seventh position due to Hindenburg. It is to be noted that the Indian government on at least three occasions revised laws apparently to help his coal businesses, saving him at least $1 billion. Critics such as Adani Watch, an Australian-based non-profit, said Hindenburg allegations, if proved true, “are just another example of what happens when crony capitalism and regime favouritism create a perceived culture of impunity.”

The allegations bring into doubt the integrity of Indian capital markets, said Andy Mukherjee, an Indian economics commentator who writes for Bloomberg Opinion. The case has also raised questions about the amounts that India’s public-sector banks have lent to Adani. Public-sector banks hold about 30 percent of the Adani Group’s debt, according to Hong Kong brokerage Credit Lyonnais Securities Asia (CLSA). 

Adani considers Hindenburg report as an “attack on India”. We should raise certain questions: Does India mean only Adani? Why should Adani suddenly hide under the carpet of patriotism? Is this not an escapism? When will the corporate corruption end in India? Let us arise, awake, think and act.