“Not Relevant”: United States Regarding Hindenburg Charges Against Adani Group
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Parhlo India- 3 minutes read
A senior US official said the government concluded that Hindenburg Research’s allegations of corporate fraud against billionaire Gautam Adani were not relevant before extending his conglomerate’s $553 million for a container terminal in Sri Lanka.
As the International Development Finance Corp., or DFC, conducted a due diligence investigation of the conglomerate, an official from the US agency said that allegations in a scathing report by Hindenburg Research, which erased around $100 billion from the Adani Group’s market value earlier this year, were front and center.
The DFC determined that the allegations in the short-seller’s report, which claimed Adani was pulling off “the biggest con in corporate history,” did not apply to Adani Ports & Special Economic Zone Ltd., the subsidiary spearheading the Sri Lankan project, the DFC official said, declining to be named. According to the official, the US agency will continue to monitor the firm to ensure that it does not unintentionally support financial misconduct or other inappropriate behavior. The US must take a different approach to infrastructure projects than China, he said.
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Adani’s Sri Lankan port deal marks one of the largest and most prominent US government-backed infrastructure projects in Asia. As a result of President Xi Jinping’s Belt and Road Initiative to build infrastructure around the world, the US has been battling growing Chinese influence in the region for years.
Adani Group has denied the allegations included in the Hindenburg report, including stock-price manipulation. There has been no evidence of wrongdoing uncovered by formal regulatory inquiries and court hearings in India. Adani stocks have rallied recently, and Adani Ports and Special Economic Zone Ltd. has gained 7.4% so far this year.
In the wake of the Hindenburg claims, the Adani Group has hailed the DFC’s investment as a vote of confidence.
The chief executive officer of Adani Ports and son of the tycoon, Karan Adani, told reporters in Colombo that “we see this as a reaffirmation by the international community of our vision, our capabilities, and our governance” when the agreement was announced.
