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Investors: Stop funding Adani or risk complicity in its deception

Investors in Adani Group companies stand at a critical juncture, faced with stark revelations that further expose Adani’s intricate web of deception and insider trading. The Hindenburg Report initially laid bare Adani’s “brazen stock manipulation and accounting fraud,” causing shockwaves in financial markets. Now, new damning evidence validates Hindenburg’s claims and unveils a labyrinthine web of stock manipulation and illegal financial manoeuvres using shell companies in Mauritius.

TIAA and Nuveen; PIMCO and Allianz; abrdn: 
Your continued investment in Adani not only jeopardises your credibility but puts you at risk of being complicit in its deception and criminal behavior.

The Hindenburg Report’s impact

The Hindenburg Report’s exposure of Adani’s “brazen stock manipulation and accounting fraud,” combined with long-standing concerns over coal expansion, climate destruction and human rights abuses, marked a turning point in the scrutiny faced by the conglomerate. This revelation had immediate repercussions in financial markets, as bond and stock values plunged, and trust in the conglomerate waned.

New evidence of insider trading

Reporters have uncovered a trail of deception involving hundreds of millions of dollars invested in publicly traded Adani stock through opaque investment funds based in Mauritius. This shocking news implicates Adani in a web of stock manipulation and illegal financial maneuvers. Notably, it reveals two individuals, Nasse Shaban Ahli and Chang Chung-Ling, as key players in this scheme. These individuals, long-time business partners of the Adani family, have also served as directors and shareholders in Adani Group companies. The proximity of these individuals to Adani’s senior members, including CEO Gautam Adani’s brother Vinod Adani, is alarming.

​​Even more troubling is the evidence suggesting that Ahli and Chang’s stock trading was coordinated with the Adani family. This revelation implies illegal insider trading, violating India’s laws around insider stock ownership.

But it doesn’t stop there. Documents obtained by the Organised Crime and Corruption Reporting Project (OCCRP) reveal how Vinod Adani himself used one of the same Mauritius funds to make his own investments. Reporters traced the flow of $100 million that was syphoned out of India as part of an alleged over-invoicing scheme investigated by the Directorate of Revenue Intelligence. The funds, it is alleged, found their way to stock markets in India for investment and disinvestment in the Adani Group.

The implications for investors

  • Complicity beyond denial: Continuing to invest in Adani Group companies following these revelations signifies an implicit endorsement of a conglomerate deeply embroiled in illicit activities.
  • Reputational damage: Your credibility is on the line. Supporting Adani in light of these revelations raises serious questions about your alignment with responsible and ethical investing principles. The market’s response to these revelations reflects the erosion of trust in Adani, and your association carries significant reputational risks.
  • Imminent financial risk: Adani’s stock and bond values are in turmoil. By maintaining investments in Adani, you expose your financial portfolio to substantial risk as the fallout from these revelations unfolds.

What should investors do now?

  • Deny new debt: Priority one is to break free from complicity by publicly denying new debt to all Adani Group entities, particularly in light of their upcoming bond issuance. This action sends an unequivocal message that you refuse to support a conglomerate entangled in fraudulent activities.
  • Divest: Protect your investments from the spiralling downfall of Adani by divesting Adani shares and bonds in your portfolios. This safeguards your credibility as a responsible investor and demonstrates your commitment to ethical investing practices.
  • Engage index providers: Protect the returns in your index tracking funds. Demand index providers, particularly MSCI, remove Adani Group companies from mainstream indices. Engage with your index providers to ensure their criteria for investment excludes companies committing illicit activities.

The revelations of the Hindenburg Report and OCCRP’s bombshell news have laid bare the deception and manipulation within the Adani Group.

Allianz and PIMCO, TIAA and Nuveen, and abrdn:

As major bondholders of Adani Group companies, your credibility and the financial stability of your investments are inextricably linked to your actions. Stand against complicity, deny debt and divest from Adani, and send a powerful message that you will not support those engaged in deception and criminality.

Adani Investors abrdn Allianz PIMCO TIAA and Nuveen