{"id":476,"date":"2023-02-06T15:02:31","date_gmt":"2023-02-06T20:02:31","guid":{"rendered":"https:\/\/embarrdowns.com\/adani-group-plunges-after-report-of-stock-manipulation-and-fraud-allegations\/"},"modified":"2023-02-06T15:02:32","modified_gmt":"2023-02-06T20:02:32","slug":"adani-group-plunges-after-report-of-stock-manipulation-and-fraud-allegations","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/adani-group-plunges-after-report-of-stock-manipulation-and-fraud-allegations\/","title":{"rendered":"Adani Group Plunges After Report of Stock Manipulation and Fraud Allegations"},"content":{"rendered":"

Gautam Adani, the billionaire chairman of the Adani Group, has experienced a rapid decline in his wealth in recent weeks.[0]<\/a><\/sup> Adani was the world’s third-richest person at the start of the year, with a net worth of $150 billion.[1]<\/a><\/sup> However, that has now been halved to $61.3 billion after a short-seller report accused Adani’s conglomerate of stock manipulation and accounting fraud.<\/p>\n

Adani Enterprises, the group’s flagship company, has seen its shares fall by more than 50% since the Hindenburg Research report was published on January 24th.[2]<\/a><\/sup> The report accused Adani of overseeing \u201cthe largest con in corporate history\u201d and raised questions about the company\u2019s substantial debt.<\/p>\n

Following the report, Adani Enterprises was forced to abandon a planned $2.5 billion share sale.[3]<\/a><\/sup> In response to the allegations, Adani issued a 413-page statement that called the short-seller\u2019s claims \u201cstale, baseless, and discredited allegations.\u201d[4]<\/a><\/sup> The statement also called the report a \u201ccalculated attack on India, the independence, integrity, and quality of Indian institutions, and the growth story and ambition of India.\u201d[4]<\/a><\/sup><\/p>\n

However, many investors remain unconvinced.[5]<\/a><\/sup> According to NYU finance professor Aswath Damodaran, Adani Enterprises\u2019 shares are still overvalued on some metrics.[6]<\/a><\/sup> He said, \u201cI still think the company is priced too high, given its fundamentals and before factoring the damage that might have [been] done to the company\u2019s reputation and long term value, by this short selling episode.\u201d[7]<\/a><\/sup><\/p>\n

The Adani Group has attempted to restore investor confidence by prepaying $1.11 billion worth of borrowings ahead of their scheduled maturity in September 2024.[8]<\/a><\/sup> However, Hindenburg Research responded by saying, \u201cFraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation we raised.\u201d[2]<\/a><\/sup><\/p>\n

The scandal has sparked a wider discussion about corporate governance in India, and the Reserve Bank of India has said that the banking sector \u201cremains resilient and stable\u201d based on its latest assessment.[5]<\/a><\/sup> The Reserve Bank has vowed to continue to monitor the situation.<\/p>\n

Hindenburg Research, the company behind the report, is a research firm that focuses on analysing accounting irregularities, undisclosed transactions, illegal\/unethical business or financial reporting practices, among other issues.[2]<\/a><\/sup><\/p>\n

0. <\/span>“Adani rout deepens despite soothing words from India’s government and billionaires” CNBC, 6 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/06\/adani-rout-deepens-efforts-to-defend-conglomerate.html<\/a><\/a><\/p>\n

1. <\/span>“Gautam Adani Drops Out Of 10 Wealthiest List: Here’s How His Loss Stacks Up To Musk, Zuckerberg And SBF – Meta …” Benzinga, 4 Feb. 2023, https:\/\/www.benzinga.com\/news\/23\/02\/30712783\/gautam-adani-drops-out-of-10-wealthiest-list-heres-how-his-loss-stacks-up-to-musk-zuckerberg-and-sbf<\/a><\/a><\/p>\n

2. <\/span>“Explained | Adani Group stocks: What is Hindenburg Research, and how does a short seller operate?” The Hindu, 30 Jan. 2023, https:\/\/www.thehindu.com\/business\/Industry\/explained-adani-group-stocks-what-is-hindenburg-research-and-how-does-a-short-seller-operate\/article66437011.ece<\/a><\/a><\/p>\n

3. <\/span>“Who Got Rich And Who Got Poor This Week: Zuckerberg, Musk, Adani And More” Forbes, 4 Feb. 2023, https:\/\/www.forbes.com\/sites\/richardjchang\/2023\/02\/04\/who-got-rich-and-poor-zuckerberg-musk-adani\/<\/a><\/a><\/p>\n

4. <\/span>“What Adani Group’s Downfall Reveals About India’s 1% | Time” TIME, 1 Feb. 2023, https:\/\/time.com\/6251935\/gautam-adani-group-india-hindenburg<\/a><\/a><\/p>\n

5. <\/span>“Adani scrambles to reassure creditors as crisis enters third week” CNN, 6 Feb. 2023, https:\/\/www.cnn.com\/2023\/02\/06\/investing\/adani-crisis-shares-hnk-intl\/index.html<\/a><\/a><\/p>\n

6. <\/span>“Hindenburg row : NYU professor values Adani Enterprises stock at \u20b9945 per share” Hindustan Times, 6 Feb. 2023, https:\/\/www.hindustantimes.com\/business\/hindenburg-row-nyu-professor-values-adani-enterprises-stock-at-945-per-share-101675674416012.html<\/a><\/a><\/p>\n

7. <\/span>“Aswath Damodaran values Adani Enterprises stock at \u20b9947 per share | Mint” Mint, 5 Feb. 2023, https:\/\/www.livemint.com\/news\/india\/ashwath-damodaran-values-adani-enterprises-stock-at-rs-947-per-share-11675617007291.html<\/a><\/a><\/p>\n

8. <\/span>“Aswath Damodaran dissects Adani crisis: What’s the fair value of this ‘competent’ infra play?” Moneycontrol, 6 Feb. 2023, https:\/\/www.moneycontrol.com\/news\/business\/markets\/aswath-damodaran-values-adani-stock-at-a-low-of-rs-947-but-retains-a-bullish-view-10012321.html<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Gautam Adani, the billionaire chairman of the Adani Group, has experienced a rapid decline in his wealth in recent weeks.[0]<\/a><\/sup> Adani was the world’s third-richest person at the start of the year, with a net worth of $150 billion.[1]<\/a><\/sup> However, that has now been halved to $61.3 billion after a short-seller report accused Adani’s conglomerate of stock manipulation and accounting fraud.<\/p>\n

Adani Enterprises, the group’s flagship company, has seen its shares fall by more than 50% since the Hindenburg Research report was published on January 24th.[2]<\/a><\/sup> The report accused Adani of overseeing \u201cthe largest con in corporate history\u201d and raised questions about the company\u2019s substantial debt.<\/p>\n

Following the report, Adani Enterprises was forced to abandon a planned $2.5 billion share sale.[3]<\/a><\/sup> In response to the allegations, Adani issued a 413-page statement that called the short-seller\u2019s claims \u201cstale, baseless, and discredited allegations.\u201d[4]<\/a><\/sup> The statement also called the report a \u201ccalculated attack on India, the independence, integrity, and quality of Indian institutions, and the growth story and ambition of India.\u201d[4]<\/a><\/sup><\/p>\n

However, many investors remain unconvinced.[5]<\/a><\/sup> According to NYU finance professor Aswath Damodaran, Adani Enterprises\u2019 shares are still overvalued on some metrics.[6]<\/a><\/sup> He said, \u201cI still think the company is priced too high, given its fundamentals and before factoring the damage that might have [been] done to the company\u2019s reputation and long term value, by this short selling episode.\u201d[7]<\/a><\/sup><\/p>\n

The Adani Group has attempted to restore investor confidence by prepaying $1.11 billion worth of borrowings ahead of their scheduled maturity in September 2024.[8]<\/a><\/sup> However, Hindenburg Research responded by saying, \u201cFraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation we raised.\u201d[2]<\/a><\/sup><\/p>\n

The scandal has sparked a wider discussion about corporate governance in India, and the Reserve Bank of India has said that the banking sector \u201cremains resilient and stable\u201d based on its latest assessment.[5]<\/a><\/sup> The Reserve Bank has vowed to continue to monitor the situation.<\/p>\n

Hindenburg Research, the company behind the report, is a research firm that focuses on analysing accounting irregularities, undisclosed transactions, illegal\/unethical business or financial reporting practices, among other issues.[2]<\/a><\/sup><\/p>\n

0. <\/span>“Adani rout deepens despite soothing words from India’s government and billionaires” CNBC, 6 Feb. 2023, https:\/\/www.cnbc.com\/2023\/02\/06\/adani-rout-deepens-efforts-to-defend-conglomerate.html<\/a><\/a><\/p>\n

1. <\/span>“Gautam Adani Drops Out Of 10 Wealthiest List: Here’s How His Loss Stacks Up To Musk, Zuckerberg And SBF – Meta …” Benzinga, 4 Feb. 2023, https:\/\/www.benzinga.com\/news\/23\/02\/30712783\/gautam-adani-drops-out-of-10-wealthiest-list-heres-how-his-loss-stacks-up-to-musk-zuckerberg-and-sbf<\/a><\/a><\/p>\n

2. <\/span>“Explained | Adani Group stocks: What is Hindenburg Research, and how does a short seller operate?” The Hindu, 30 Jan. 2023, https:\/\/www.thehindu.com\/business\/Industry\/explained-adani-group-stocks-what-is-hindenburg-research-and-how-does-a-short-seller-operate\/article66437011.ece<\/a><\/a><\/p>\n

3. <\/span>“Who Got Rich And Who Got Poor This Week: Zuckerberg, Musk, Adani And More” Forbes, 4 Feb. 2023, https:\/\/www.forbes.com\/sites\/richardjchang\/2023\/02\/04\/who-got-rich-and-poor-zuckerberg-musk-adani\/<\/a><\/a><\/p>\n

4. <\/span>“What Adani Group’s Downfall Reveals About India’s 1% | Time” TIME, 1 Feb. 2023, https:\/\/time.com\/6251935\/gautam-adani-group-india-hindenburg<\/a><\/a><\/p>\n

5. <\/span>“Adani scrambles to reassure creditors as crisis enters third week” CNN, 6 Feb. 2023, https:\/\/www.cnn.com\/2023\/02\/06\/investing\/adani-crisis-shares-hnk-intl\/index.html<\/a><\/a><\/p>\n

6. <\/span>“Hindenburg row : NYU professor values Adani Enterprises stock at \u20b9945 per share” Hindustan Times, 6 Feb. 2023, https:\/\/www.hindustantimes.com\/business\/hindenburg-row-nyu-professor-values-adani-enterprises-stock-at-945-per-share-101675674416012.html<\/a><\/a><\/p>\n

7. <\/span>“Aswath Damodaran values Adani Enterprises stock at \u20b9947 per share | Mint” Mint, 5 Feb. 2023, https:\/\/www.livemint.com\/news\/india\/ashwath-damodaran-values-adani-enterprises-stock-at-rs-947-per-share-11675617007291.html<\/a><\/a><\/p>\n

8. <\/span>“Aswath Damodaran dissects Adani crisis: What’s the fair value of this ‘competent’ infra play?” Moneycontrol, 6 Feb. 2023, https:\/\/www.moneycontrol.com\/news\/business\/markets\/aswath-damodaran-values-adani-stock-at-a-low-of-rs-947-but-retains-a-bullish-view-10012321.html<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":475,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/476"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=476"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/476\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/475"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=476"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=476"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=476"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}