the company denies it, the Indians lose their savings

The richest man in Asia lost more than 50,000 million dollars in the stock market after the publication of a report detailing a series of illicit activities by his group. Experts believe that the Indian government made many concessions to the conglomerate in recent years. These include direct investments from India’s largest insurance company.

New Delhi () – The Adani Group company, owned by Asia’s richest man, Gautam Adani, has submitted a detailed document to refute accusations of fraud made in recent days by Hindenburg Research, an American financial research and trading company. Meanwhile, due to state investments in the conglomerate, Indian savers are also at risk of losing their capital.

The Adani group lost more than $50 billion on the stock market after the investigation was published. He called the allegations about his activities (carried out, according to Hindenburg Research, among other things, through assets registered in tax havens) a “calculated attack on India”, claiming that he had complied with all local laws.

In response, the US fact-finding team stated that it believes that “India is a dynamic democracy and an emerging superpower with an exciting future”, but at the same time that “Delhi’s future is being held back by the Adani group, which covers itself with the Indian flag while systematically plundering the nation”.

Adani, 60, is very close to Indian Prime Minister Narendra Modi and, according to analysts, has built an economic empire since the late 1980s, among other things, thanks to concessions granted by the Indian state. These concessions were applied in sectors that are considered central to India’s economic growth ambitions and in which it wants to be self-sufficient, such as infrastructure, especially ports, and energy. Thus, Adani went from having a heritage of “only” 8,900 million in 2020 to 143,000 million in 2022, while now, after investigations by Hindenburg Research, it fell to 84,400 million.

But not only that: Adani also benefited from direct government investments, the consequences of which could fall on the Indian middle class. India’s largest state insurer, Life Insurance Corporation (LIC), invested crores of rupees in the conglomerate in recent years, and today owns shares in Adani Enterprises, Adani Ports, Adani Total Gas, Adani Transmissions and Adani Green, with stakes of 4.23%, 9.14%, 5.96%, 3.65% and 1.28%, respectively. In the two market sessions since the publication of the Hindenburg Research report, these five companies have lost at least Rs 165 billion, or $2 billion. It is not the first time that criticism has been raised for the bad investments of the LIC, which has always generated bad returns for its investors, but it is the first time that the insurer has had to face large losses from a private company.

This also means that the markets immediately took seriously the accusations by Hindenburg Research, which Adani accuses of spreading false information to profit from short selling practices, a purely speculative tool that consists of betting against the price of shares of a company hoping they will go down. In the past, however, Hindenburg’s reports have had some success in exposing various illegal practices employed by companies, although the investigative team is known to have profited at the cost of the companies in question going bankrupt.