In focus: Gautam Adani, the richest person in Asia and the second richest in the world.
Nicholas ImfeldEditor Economics
Wall Street is delivering material for a Hollywood flick. Starring: a US hedge fund and the richest man in Asia. Who is the hero and who is the villain? Not clear!
“The Adani group has systematically plundered India.”Hindenburg hedge fund
The hedge fund bears the name Hindenburg – a deliberate allusion to the “Hindenburg” disaster in 1937, when a zeppelin burst into flames on approach to New York and 36 people died.
Last week, Hindenburg shocked Wall Street investors when the hedge fund – an investment fund with a highly speculative investment strategy – published a report on the Adani Group, a mega-corporation from India. “This is one of the most egregious examples of corporate fraud in history,” Hindenburg wrote.
The Adani Group is said to have “systematically plundered” India, according to the US investment firm’s serious accusation. The core of the report is about the suspicion of price manipulation and balance sheet falsification using a network of letterbox companies. At first glance, the report seems serious – according to the US media, the allegations have been documented down to the last detail.
38-year-old activist destroys billions
Head of the Adani group is Gautam Adani (60), the richest man in Asia and the second richest person in the world. He founded the conglomerate – a conglomerate – in 1988. Today the group is the largest port operator and one of the leading airport operators and logisticians in India.
Gautam Adani was worth CHF 112 billion last week. Today it is still 85 billion Swiss francs. Adani lost 27 billion francs (!) within days because of Hindenburg’s report. His group has lost 65 billion francs in value over the same period.
“This is a calculated attack on India’s growth story and ambitions”Gautam Adani
Nate Anderson (38) is responsible for this destruction of value. He is the boss of Hindenburg, is considered a newcomer and activist on Wall Street. It was Anderson who commissioned the report against the Adani group two years ago. “We believe that India is a vibrant democracy and a rising superpower with an exciting future,” he said last week. “We also believe that India’s future will be hampered by Adani.”
He already messed with Elon Musk
Anderson, the white knight concerned about India’s democracy? Not really. With his hedge fund, he has a large “short position” against the Indian mega-corporation. Means: Anderson has bet with Hindenburg on falling prices of Adani. The recent stock price collapse means payday for Anderson and his investment firm.
Already in the summer of 2022, Anderson messed with a big one. At that time, the activist shot against Elon Musk (51) and Twitter. However, his bets against the short message service were not as successful as they are now. Nevertheless, Anderson already has the nickname “giant killer” for sure.
Report is a “huge lie”
But Gautam Adani doesn’t want to go down without a fight. At the weekend he launched an advertising offensive – with advertisements on the front pages of the largest Indian newspapers. On Monday then the step before the world public. In a more than 400-page document, the 60-year-old tried to refute the suspicion that his rise to one of the richest people in the world was not right. “The Hindenburg report is a huge lie,” Adani said.
He senses a conspiracy on Wall Street: “This is a calculated attack on India’s growth history and ambitions.”
Affair also hurts India’s prime minister
What is the real truth behind the Hindenburg Report allegations? Uncertain. In addition to the turmoil on the stock exchanges and the financial implications for Adani, the saga could also have a political component. Because for India’s conservative Prime Minister Narendra Modi (72), the scandal is becoming more and more of a problem – and that in the year before the next parliamentary elections.
The opposition exploits the Hindenburg-Adani affair. She accuses Modi of maintaining too close relationships with the rich businessman – and publicly speculates whether Adani is covered by the government.
Whether it’s a Wall Street conspiracy, an attack on India, or the next big financial scandal? There are still many open questions. Sequel follows.