The ongoing battle between the Adani Group and U.S. short-seller Hindenburg Research took another turn on Thursday when the latter claimed that Swiss authorities had frozen over $310 million linked to the Indian conglomerate.
According to Hindenburg, Swiss court records revealed that the funds, held across multiple Swiss bank accounts, are part of an investigation into alleged money laundering and securities fraud by the Adani Group, dating back to 2021.
In a series of posts on X (formerly Twitter), Hindenburg cited Swiss media reports detailing how offshore entities, allegedly tied to a frontman for billionaire Gautam Adani, were involved in dubious financial practices.
These entities, registered in tax havens such as the British Virgin Islands, Mauritius, and Bermuda, allegedly held large stakes in Adani stock. According to the U.S. firm, these opaque structures raise concerns about stock manipulation and market stability.
Hindenburg noted that the Swiss investigation began well before their own bombshell report in January 2023, which accused the Adani Group of widespread fraud and stock manipulation, with alleged financial misconduct amounting to $218 billion.
Adani Group Denies Allegations
The Adani Group swiftly rejected Hindenburg’s latest claims, calling the allegations “baseless.” In an official statement, the conglomerate reiterated its transparency and compliance with legal requirements, stating that neither the group nor its companies are involved in any Swiss court proceedings.
“We unequivocally reject and deny the baseless allegations presented,” the statement read.
It went on to say that "even in the alleged order, the Swiss court has neither mentioned our group companies, nor have we received any requests for clarification or information from any such authority or regulatory body. We reiterate that our overseas holding structure is transparent, fully disclosed, and compliant with all relevant laws."
The allegations, it said, "are clearly preposterous, irrational, and absurd. We have no hesitation in stating that this is yet another orchestrated and egregious attempt by the same cohorts acting in unison to inflict irreversible damage on our group's reputation and market value." "The Adani Group remains steadfastly committed to transparency and compliance with all legal and regulatory requirements," it said, adding it "strongly condemns" the allegations.
Scrutiny on SEBI Chairperson Madhabi Buch
Meanwhile, Hindenburg has also raised concerns about the role of Madhabi Buch, chairperson of India’s Securities and Exchange Board (SEBI), in the Adani investigations. The short-seller accused Buch of delaying the inquiry into the conglomerate due to conflicts of interest stemming from her past investments.
Opposition political parties in India, particularly the Congress party, have intensified their scrutiny of Buch, alleging that she holds significant shares in a company still offering advisory services, and pointing out that her husband has earned income from companies she oversees.
Buch has refuted these accusations, clarifying that her investments pre-date her tenure at SEBI and were fully disclosed. She dismissed Hindenburg’s claims as an “attempt at character assassination,” following SEBI’s enforcement actions against the short-seller for violating Indian regulations.
The Broader Hindenburg Report
The latest developments come in the wake of Hindenburg’s initial report, published in January 2023, which accused the Adani Group of stock manipulation, accounting fraud, and using offshore shell companies for illegal activities. The report claimed that key Adani companies faced liquidity issues, with significant debts and low current ratios.
Additionally, the report implicated Vinod Adani, Gautam Adani’s brother, in managing offshore shell entities allegedly involved in stock parking and money laundering. Hindenburg also raised concerns about Adani’s independent auditor, a small firm with limited capacity to effectively scrutinize the conglomerate’s financial operations.
Despite multiple investigations by Indian authorities, including SEBI, Hindenburg claims that enforcement actions against the Adani Group have been minimal, allowing the alleged fraudulent activities to continue.
