IIt does not require a particularly dramatic event – or series of events – to take over the news cycle the week the Union Budget is presented. The Adani scam did exactly that. While the Budget and to an extent the Economic Survey made a valiant effort to grab headlines, his tenure at the helm was short-lived.
As the immediate analysis went on, media houses across India swiftly returned to the sensational ongoing decline of Gautam Adani, the world’s third richest man.
And this is why Adani Enterprises and the relentless attacks on it are ThePrint’s Newsmaker of the Week.
413 pages of drama
The week started with a bang. On January 29 Adani Group released a 413 page answer for various allegations leveled against it by the United States short selling firm Hindenburg Research. Adani came out spewing fire. In its reply, the group claimed that Hindenburg had answered all 88 questions in its original report issued on 24 January.
Perhaps the Adani group also felt it could take advantage of the right-wing social media rallying around it. company Claimed that the Hindenburg Report was “a planned attack on India” as well as the independence, integrity and quality of Indian institutions.
The fight did not stop here. Adani group targeted Hindenburg itself, Saying It has published “this report not for any altruistic reasons, but purely out of selfish motives and in open violation of applicable securities and foreign exchange laws”.
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Hindenburg’s befitting reply to Adani
Hindenburg responded quickly, To publish Reply to Adani Group on the morning of 30 January. At first, Hindenburg took up the claims of the Adani group, which equated an attack on itself with an attack on India. Hindenburg said, “To be clear, we believe that India is a vibrant democracy and a rising superpower with an exciting future.” Systematically looting the country.
We also recognize that fraud is fraud, even if it is committed by one of the wealthiest men in the world, Hindenburg added in his reply. Clearly, this David was not going to take the attacks of Goliath lying down.
The short seller further said that “in terms of substance, Adani’s ‘413 page’ response included approximately 30 pages focused on issues relevant to our report.” In fact, it is worth noting that, in Adani’s lengthy response, an annexure containing background information on previous court cases and judgments began on page 55.
Hindenburg pointed out that although the Adani Group claimed to have answered all its questions, it sidestepped the important issue of Gautam Adani’s elder brother Vinod Adani, his alleged front companies and his alleged dealings with Adani Group firms. Had done it.
This has become a hallmark of Hindenburg’s ruthless style, it said: “In other words, we are expected to believe that Gautam Adani has no idea why his brother Vinod lent huge sums of money to Adani entities, And it is not known where money originated from.
Hindenburg further asked in his scathing reply, if any of these were true, Gautama could have easily solved the mystery by calling his brother. “or asking him [Vinod Adani] At the next family dinner, why is he directing billions of dollars to Adani-controlled entities through a network of opaque offshore shell entities,” it added.
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beginning of turmoil
It was only Monday morning; The week had only just begun.
During Monday and Tuesday, the Adani group managed to rebound against the bears in the stock market, with shares of Adani Enterprises closing marginally higher on both the days. This recovery must have come as a great relief to Gautam Adani, as it happened after a erase it Worth about Rs 4.17 lakh crore from Adani shares last week.
However, this respite was short-lived. Wednesday—Budget Day, coincidentally—news It emerged that Swiss investment banking firm Credit Suisse Group AG had stopped accepting Adani Group bonds as collateral for margin loans given to its private banking clients. While it was not correct to say, it basically meant that Credit Suisse no longer trusted the value of bonds issued by Adani companies.
became more international after the move Discussion to the point. Media houses claimed that there were indications that the Adani group had allegedly used various shady channels to invest money in its own follow-on public offer (FPO), another possible sign of weakness and malfeasance. There was a signal.
what happened after wild destruction of market value for Adani shares. Shares of Adani Enterprises ended the day’s trading session with a heavy fall of 28.45 per cent. Big and surprising news came again: Adani Enterprises late on Wednesday night announced They were canceling their Rs 20,000 crore FPO – which was India’s largest FPO – to “protect investors”.
The announcement was unprecedented and embarrassing, and it is perhaps no coincidence that Adani released it at night, long after the stock market closed and most news agencies had closed for the day.
Breathe, and drink some water; It was only a Wednesday.
If a rising tide lifts all boats, a tsunami sinks them all. Those who could give bail did so. on Thursday, news It came as Joe Johnson, brother of former United Kingdom Prime Minister Boris Johnson, resigned as a director on the board of Elara Capital, a company linked to the UK-based Adani Group and which featured prominently in the original Hindenburg report.
The same day, Citigroup’s wealth arm said that from February 7, it would also stop accepting securities of Adani companies as collateral for margin loans.
The fighting did not stop here. National Stock Exchange on Thursday announced It was placing the shares of Adani Enterprises, Adani Ports and Ambuja Cements (an Adani company) under additional surveillance. Internationally, the S&P Dow Jones Index Said It will remove Adani Enterprises from its sustainability indices “following a media and stakeholder analysis prompted by allegations of stock manipulation and accounting fraud”.
Why? He’s done Thursday. Early on Friday, and at the time of writing, shares of Adani listed companies already continued to decline Lost $120 billion – or nearly half the value of the Adani Group since the original Hindenburg Report came out. The stock of Adani Enterprises briefly recovered during the day, but declined 2.2 per cent in Friday’s trade.
It’s been a week, and Gautam Adani should be thankful that the stock markets are closed for the weekend. But it’s a safe bet this story still has a ways to go. Indian regulators are yet to officially jump into the fray.
(Edited by Zoya Bhatti)