Indian Billionaire Adani Pulling 'Largest Con In Corporate History,' Says Short Seller: 'Companies Have 85% Downside' On Fundamentals

After being red-flagged for over-leveraged expansion, the Adani Group is again in controversy. 

What Happened: Hindenburg Research, a short seller and forensic financial research group, has accused Adani of engaging in a "brazen stock manipulation and accounting fraud scheme over the course of decades."

Adani Group did not immediately respond to Benzinga’s request for comment.

Prominent US short-seller Hindenburg Research @HindenburgRes goes after Adani Group: Says Gautam Adani is "pulling the largest con in corporate history."

— Benzinga India (@BenzingaIndia) January 25, 2023

The research noted that Gautam Adani's net worth of roughly $120 billion — in which $100 billion was added in the past three years — was largely through stock price appreciation in the conglomerate's 7 key listed companies, which have spiked an average of 819% over the period.

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As part of its research in the past two years, the research group spoke with dozens of individuals, including former executives of the conglomerate, reviewing thousands of documents and conducting diligence site visits in almost half a dozen countries. 

"Its 7 key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations," Hindenburg Research said, pointing towards the financials of Adani Group at face value.

It added that the key listed Adani firms have taken substantial debt, including pledging shares of their inflated stock for loans, "putting the entire group on precarious financial footing."

"5 of 7 key listed companies have reported ‘current ratios' below 1, indicating near-term liquidity pressure." 

Labeling it as "a family business," the research report also highlighted that 8 of the 22 group's top ranks and key leaders are Adani family members, allowing it to control the company’s financials and key decisions. 

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