US says Hindenburg allegations against Adani firm 'not relevant': Report

The US government has recently said that short-seller Hindenburg Research’s allegations of corporate fraud against billionaire and Adani Group Chairman Gautam Adani weren’t relevant and didn't impact the US decision to grant up to $553 million for a Sri Lankan terminal, a senior US official said.

A report in Bloomberg News said allegations put up by US-based Hindenburg Research were in front and centre as the International Development Finance Corp., or DFC, conducted a due diligence investigation of the conglomerate.

The report said that DFC was satisfied that the accusations in the short-seller’s report, which said Adani was pulling off “the largest con in corporate history,” weren’t applicable to Adani Ports & Special Economic Zone Ltd., the subsidiary spearheading the Sri Lankan project.

The official told Bloomberg News that US agency will continue to monitor the Adani group company to ensure the US government doesn’t unintentionally support financial misconduct or other inappropriate behaviour.

In November, the US International Development Finance Corporation announced a $553 million investment in the Adani Ports-led container terminal project in Colombo. The investment in the new terminal is aimed at catering to growing economies in the region, by taking advantage of Sri Lanka’s prime location along major shipping routes, US officials had said that time.

In September 2021, Adani Ports signed a $700-million deal with the Sri Lanka Ports Authority (SLPA) and Sri Lankan conglomerate John Keells Holdings, to jointly develop the terminal.

The Adani Group has been entangled in controversy since January 2023 when US-based Hindenburg Research alleged corporate misgovernance, among other charges.

In its report, Hindenburg Research said that Adani Ports was the only listed entity in the group “with significant reserves” at Rs 86 billion at that time. It highlighted stock prices of the seven key Adani listed companies, including Adani Ports, “mysteriously surge” in the past three years.

In August, Deloitte decided to resign as the auditor of Adani Ports, after flagging concerns over certain transactions highlighted in the Hindenburg report.

On its part, the Adani Group has denied the allegations featured in the Hindenburg report.

Adani Group shares

The Adani Group saw a wealth surge of over Rs 1.83 lakh crore in last one week with the total mcap around Rs 11.96 lakh crore.

Since November 23, Adani Total Gas jumped 39 per cent, Adani Energy Solutions earned 26 per cent, Adani Power surged 23 per cent, Adani Green Energy 20 per cent, NDTV 19 per cent, Adani Enterprises 16 per cent, Adani Wilmar 10 per cent while, Ambuja Cements, Adani Ports and ACC jumped around 9 per cent each.

Adani Ports and Special Economic Zone Ltd surged more than 5 per cent to hit new 52-week highs at Rs 924.80 on Monday.

At 10.12 AM, Adani Ports shares were trading at Rs 938, up by 6.74 per cent.