Adani Enterprises Ltd (ADEL.NSE) Fraud and Stock Manipulation Case

On January 24, 2023, shares of Adani Group's publicly listed companies plunged after Hindenburg Research alleged the Company in fraud and manipulations.

On this news, Adani Enterprises (ADEL) shares dropped about 20%, injuring investors around the globe.

Hindenburg Research alleged that Adani Group was “engaged in a brazen stock manipulation and accounting fraud scheme” in puffing out its valuations and accused the firm of money laundering. 
The research firm said that it sees an 85% downside from current valuations, based solely on their fundamentals clarifying that multiple firms under Adani were highly leveraged in comparison to their peers and that the situation was worsening due to negative free cash flows. 
Concerns over Adani’s debt position came to the light after the release of a CreditSights report in 2022 that described the group as largely overleveraged which allegation the Company denied. 
Adani Enterprises recently announced a $2.5 billion Follow-on Public Offering (FPO) in which participating major international banks BNP Paribas, Société Générale, and Goldman Sachs, bought the stock at 3276 rupees which is 15% higher than the current price.
Pershing Square's Bill Ackman found the Hindenburg Research's report on Adani Group companies “highly credible and extremely well researched”.

Adani Group called the report a malicious combination of selective misinformation and outdated, baseless, and discredited claims aimed at damaging the reputation and hurting demand for the stock. The group said it is exploring the possibility of taking legal action.

In the last 2 trading sessions, the market capitalization of Adani Group has decreased by over $50 billion, seriously damaging investors.

Following Hindenburg’s January 2023 report, India’s Supreme Court instructed country’s Securities and Exchange regulator (SEBI) to conduct a probe into claims of stock price manipulation by Adani Group.

On August 10, 2024, Hindenburg Research published a new report claiming that the Chairperson of SEBI and her husband had investments in offshore funds used in the money siphoning scandal that SEBI was looking into.

Given the seriousness of the allegations, the accompanying events (Offering), and the magnitude of the market reaction, Investors have every reason to suspect that one of the participants in the Case has grossly violated the rights of shareholders, leading to significant monetary losses.

Case Status

Attorney Investigation

Alleged Offence

Mismanagement,

Misleading Statements,

Financial Misrepresentation,

Fraud,

Failure to Disclose,

Price manipulation,

Insider Trading,

Malpractice,

Negligence,

Omissions,

Other

Suspected Party

Directors,

Management,

Shareholder,

Government Authority,

Investment Bank,

Service Provider,

Research Entity

Security Type

Stocks

Trade Direction

Long

Shock Event Date

01/24/2023

Adani Enterprises Ltd (ADEL.NSE) Fraud and Stock Manipulation Case

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