Adani Group responds to $310 million allegation amidst ongoing Hindenburg controversy

In an ongoing saga that has captured the attention of investors globally, the Adani Group has reacted firmly to allegations made by US-based short-seller Hindenburg Research. The accusations revolve around the freezing of $310 million in Swiss bank accounts linked to the conglomerate, as detailed by The Economic Times in a report. The Adani Group has categorically stated that the allegations are baseless, with their spokesperson asserting, "Our overseas holding structure is transparent, fully disclosed, and compliant with all relevant laws."

Adani Group’s full press release

The Adani Group came out with a response against the most recent allegations from Hindenburg Research through a press release on September 12. The complete press release is as follows:

"We unequivocally reject and deny the baseless allegations presented. The Adani Group has no involvement in any Swiss court proceedings, nor have any of our company accounts been subject to sequestration by any authority," the Adani Group said in a statement.

"Furthermore, 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 Adani Group said.

"These allegations 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," it said.

"The Adani Group remains steadfastly committed to transparency and compliance with all legal and regulatory requirements. We strongly condemn this effort and urge you to refrain from publishing this story. Should you decide to proceed, we request that you include our statement in full," the Adani Group said.

Details about the allegations against the Adani Group

The allegations date back to a probe initiated in 2021 when the US short-seller accused the conglomerate of utilising opaque offshore entities to manipulate financial operations. According to Hindenburg, Swiss criminal court records detail how an individual associated with Adani invested heavily in questionable BVI, Mauritius, and Bermuda funds that primarily held Adani stock. These assertions have raised significant concerns over the financial practices employed by the company.

Hindenburg’s tweet on September 12, 2024

Adani Group’s response was against the most recent tweet of Hindenburg Research. The complete tweet is as follows:

“Swiss authorities have frozen more than $310 million in funds across multiple Swiss bank accounts as part of a money laundering and securities forgery investigation into Adani, dating back as early as 2021.”

“Prosecutors detailed how an Adani frontman invested in opaque BVI/Mauritius & Bermuda funds that almost exclusively owned Adani stocks, according to newly released Swiss criminal court records reported by Swiss media outlet”

Swiss authorities investigate alleged wrongdoing

The Swiss authorities, now investigating these claims, have purportedly frozen six bank accounts linked to Gautam Adani. A report published by the Geneva Public Prosecutor's Office states that investigations had commenced well before the first allegations made by Hindenburg in January 2023, which previously accused the Adani Group of using tax havens to evade local market regulations.

Hindenburg-SEBI Showdown

Meanwhile, the controversy deepens as the opposition Congress party has intensified its scrutiny of SEBI chairperson Madhabi Buch, alleging a potential conflict of interest that might influence the ongoing investigations. The party claims that Buch holds a 99 per cent stake in a company providing consultancy services, although both Buch and Adani have denied any wrongdoing.

Buch has rebuffed Hindenburg's claims as "character assassination" and clarified that her investments predate her appointment as SEBI chairperson. She termed Hindenburg's allegations as an attempt at "character assassination" following the regulator's enforcement action and "show cause" notice to the USbased shortseller for violating Indian rules. A show cause notice signals an intention to take disciplinary action if satisfactory explanations are not provided.

Buch's term is due to conclude in March next year, and she faces increasing political pressure in the wake of these allegations. As the situation unfolds, global investors will be watching closely to see how this saga develops and what implications it may hold for the Adani Group's operations going forward.

SEBI Chief issues a fresh rebuttal; opposition MP files complaint against her

Madhabi Puri Buch and Dhaval Buch have firmly denied recent allegations questioning their integrity, labelling the accusations as false and defamatory in a press release on September 13.

In their statement, the couple described the accusations as “completely false, malicious and defamatory,” stressing that the allegations were "motivated to mislead the public" and designed to “tarnish the reputation of individuals, respected corporates, as well as institutions of the country.”

Further, as the controversy snowballs, Trinamool Congress (TMC) Member of Parliament Mahua Moitra has also lodged a formal complaint with the Lokpal against Madhabi Puri Buch, the current chairperson of the Securities and Exchange Board of India (SEBI). The complaint, filed on September 11, accuses Buch of improper conduct and engaging in quid pro quo arrangements that allegedly threaten India's national interests. As this is a developing issue it is to be seen how the parties involved respond to the ongoing controversy surrounding the SEBI chief.