Hindenburg's Nate Anderson likens Adani case to Germany's Wirecard scandal

Nate Anderson, founder of Hindenburg Research, on Tuesday said the Adani Group is targeting journalist Dan McCrum at the Financial Times (FT) for the exclusive article on the group's operations. He further said that the last company, that tried to attack the Financial Times reports, was Wirecard, which was later found to be the largest fraud in German history.

Anderson-led Hindenburg Research had released a report in January accusing the Adani Group of “brazen stock manipulation and accounting fraud”. Following which, the conglomerate group stocks witnessed a bloodbath at the stock market and lost nearly Rs 10 lakh crore in market cap.

 

 

On Monday, Adani Group condemned the "renewed attempt" by the Financial Times to "rehash old and baseless allegations to tarnish the name and standing of the Adani Group".

The ports-to-energy conglomerate said: “This is part of their extended campaign to advance vested interests under the guise of public interest.”  

The FT had reportedly published an article on August 31, 2023, in collaboration with the Organized Crime and Corruption Reporting Project (OCCRP), wherein it said two men allegedly linked to Gautam Adani's brother Vinod Adani were using Bermuda's Global Opportunities Fund "to amass and trade large positions in shares of the Adani Group". They identified the two men as Nasser Ali Shaban Ahli from the United Arab Emirates and Chang Chung-Ling from Taiwan. Adani Group has denied the claims.

OCCRP claimed that millions were invested in some publicly traded stocks of Adani Group via "opaque" Mauritius funds that "obscured" the involvement of alleged business partners of the Adani family.

It further said that during its probe it found at least two cases where the investors bought and sold Adani stock through such offshore structures.

It is to be noted that OCCRP is funded by George Soros, who has been openly critical of the Adani Group.

The FT's story was said to be based on a General Alert Circular No.11/2016/CI dated March 30, 2016, issued by the Directorate of Revenue Intelligence (DRI).

In its statement against the UK-based newspaper, the Adani Group alleged that the media outlet has been recycling old and unsubstantiated allegations to harm the global reputation of the conglomerate.

It called FT's articles as an "extended campaign" to serve undisclosed interests under the guise of public concern.

Adani Group said, “It is unfortunate that some foreign entities like the OCCRP, supported by a section of the foreign media, short-sellers and domestic collaborators, have launched a series of attacks against the Adani Group with the primary intent of dragging down its market value. In fact, these individuals and groups, bound by the common objective of damaging the Adani Group, have developed a playbook which is being executed to perfection by a well-oiled and professional machinery working in sync both within India and abroad.”

The company statement said: “There is a renewed attempt by the Financial Times and its collaborators to rehash old and baseless allegations to tarnish the name and standing of the Adani Group. This is part of their extended campaign to advance vested interests under the guise of public interest.”

“Continuing their relentless campaign, the next attack is being fronted by Dan McCrum of the Financial Times, who jointly with the OCCRP put out a false narrative against the Adani Group on 31 August 2023. The OCCRP is funded by George Soros, who has openly declared his hostility against the Adani Group,” the statement added.

The conglomerate accused the FT of attempting to “financially destabilize” the Adani Group by resurrecting an old and unfounded accusation of over-invoicing coal imports.

The Adani Group pointed out that the circular mentioned as many as 40 importers, including Adani Group companies. These importers encompassed several major private power generators in India, such as Reliance Infra, JSW Steels, and Essar, along with state power-generating companies from various regions and government entities like NTPC and MSTC.

“The FT’s brazen agenda is exposed by the fact that they have singled out the Adani Group, while the DRI’s Circular, the raison d'atre for the whole story, mentions as many as 40 importers including the Adani Group companies,” said the conglomerate.

The Adani Group highlighted a specific case involving Knowledge Infrastructure, one of the 40 importers listed in the DRI's circular.

Further explaining its stand, the company said the DRI's Show Cause Notice alleging over-valuation in the import of coal was quashed by the appellate tribunal (CESTAT). Furthermore, the DRI's appeal was reportedly withdrawn by the Supreme Court of India on January 24, 2023, with an acknowledgment of the government's stance against engaging in futile litigation.

Wirecard scandal

Wirecard, which was founded in 1999 and was based in Munich, emerged as a new-age German tech company ready to take on the established titans of Europe's largest economy. Wirecard was suspected to have engaged in a series of fraudulent accounting activities to inflate its profit. The accounting scandal shocked the world and prosecutors are still pursuing those involved in the fraud scheme.

FT's Dan McCrum in his report, Wirecard’s suspect accounting practices revealed in October 2019, said internal company spreadsheets, along with related correspondence between senior members of Wirecard’s finance team, appear to indicate a concerted effort to fraudulently inflate sales and profits at Wirecard businesses in Dubai and Ireland.

In June 2020, Wirecard was eventually forced to admit that 1.9 billion euros were missing from its balance sheet.