There’s a popular Yoruba saying/prayer that says “olohun gbawa lowo eni ti o n shoni ti a o sho” which literally translates to “God deliver us from people (enemies) who, unknowing to us, are watching and monitoring us closely”.

These are the thoughts and prayers that Gautam Adani will surely be reciting in the past thirteen days. Just thirteen days ago (January 24 precisely), Gautam Adani was the richest man in India and the Asian continent with a net worth of $133.9 billion (data from Dec. 2022). He was also the third richest man in the world as of the aforementioned date. However, all these changed within 24 hours when a research and activist short-seller firm based in the US, Hindenburg Research released a comprehensive report alleging Adani Group, the flagship company owned by Billionaire Gautam Adani of financial misappropriation and accounting malpractice over a decade now.

Adani Group is a conglomerate with several holdings in different sectors including the energy sector, mining, food processing, real estate, defence, cement, financial services, and so on. The firm was one of the top gainers in 2022 as it grew its portfolio as well as value. Gautam Adani is the owner/chairman of Adani Group.

Hindenburg Research is a US Research firm created in 2017. The firm’s primary operation is to short-sell on stocks and make a profit. I know you must be wondering, what short selling means, well look no further, short selling involves making a profit by betting on the fall in the share price of an entity’s share. In simpler terms, it involves placing a bet that a company’s share price will suffer and drop significantly – weird right? Lol (bad belle abi? ).

While Adani Group and Gautam Adani must be toasting and celebrating their success by the end of 2022, unknown to them, Hindenburg Research is finalizing its report on its 88 allegations against the conglomerate. On January 24, 2023, Hindenburg Research released a report which contains 88 allegations regarding shady dealings, financial misappropriation, money laundering acts, and other accounting malpractices allegedly perpetrated by the group. The report alleges that the group utilizes several offshore havens and entities in countries such as Mauritius, UAE, Cyprus, Singapore, and several Caribbean islands which are allegedly used for stock and accounting manipulation. The report also alleges severally that the company engaged in several suspicious dealings worth billions of dollars with the Chairman’s brother Vinod Adani and its plethora of related entities.

According to Hindenburg, it has been carrying out these investigations on the Adani Group for the past two years (which kind witch-hunt be this?). Ever since the report, the share price of the group has plummeted continuously as investors’ confidence waned. Despite a response from the Group on January 29 refuting these allegations, the share price has continued to drop. The Group has lost over $100 billion since the Hindenburg research was published and Gautam Adani, the richest man in Asia and third richest in the world just a few weeks ago, has fallen out of the top 20 richest persons in the world.

What does Hindenburg Research stand to gain from this? Lol – a lot my dear!

Want to know how this is possible? Read on short selling here:https://theconversation.com/short-selling-adani-how-an-obscure-us-firm-profited-from-triggering-the-indian-giants-price-plunge-198991

Can the group bounce back from its current crises?
Will the group be investigated by SEBI (Security and Exchange Board of India)?
Can Gautam Adani bounce back and regain his position?

The next few weeks will surely point us towards a position on these questions. In the meantime, we chill and pray fervently against an “unknown enemy” giving us close marking unknowingly.


For further readings (Sources):
Here is Hindenburg Research’s response to Adani Group’s report on the allegations:
https://hindenburgresearch.com/adani-response/#_ftnref1

More on short selling:
https://www.financestrategists.com/wealth-management/stocks/short-selling/
Recommended movie to understand short selling: The Big Short

https://www.reuters.com/markets/rates-bonds/adani-enterprises-shelves-122-million-bond-plan-bloomberg-news-2023-02-04/