Fraud claims targeting Gautam Adani provoke nationalist backlash in India
In a tweet, the prominent Indian film director Vivek Ranjan Agnihotri added Hindenburg to a list of other foreign companies that have been accused by some Indians of unfairly attacking their country. The Organiser, a publication affiliated with the right-wing Hindu group Rashtriya Swayamsevak Sangh, followed suit.
The outpouring of nationalist outrage came after Hindenburg released a lengthy report late last month taking aim at Adani — a close ally of Prime Minister Narendra Modi’s and, until recently, Asia’s richest man. The allegations triggered a massive sell-off of shares in Adani’s companies. Hindenburg announced that it had taken a short position, meaning it had bet that Adani shares would fall.
The reaction in India reflects in part how closely intertwined the reputations and ideologies of politicians and companies have become in recent years.
“Indian politicians used to never identify with any industrialists, even if they might have taken money from them. It was the U.S. that would celebrate Rockefeller,” said the business history writer Harish Damodaran. “Modi is the first prime minister who has made no bones about it. In that way, politics has changed in India. [Corporations] now tie in with a nationalist ideology.”
Hindenburg’s report accused Adani’s conglomerate — which is active in multiple sectors including energy and infrastructure — of artificially boosting the share prices of its firms over several decades by using a network of overseas shell companies linked to Adani’s family members. Calling this the “largest con in corporate history,” Hindenburg said that Adani’s companies were collectively overvalued on India’s stock market by more than 80 percent, causing share prices to nosedive by more than $100 billion just ahead of a planned sale of new shares.
The Adani Group has vigorously rejected the allegations. In a 413-page response, the Adani Group said, “This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.”
The Adani Group’s chief financial officer, Jugeshinder Singh, sharply rejected the allegations in a video with the Indian flag in the background and, in an interview with local media, invoked a British massacre of hundreds of Indians during the anti-colonial struggle.
Boisterous cries by leaders of India’s political opposition for an independent investigation led to a three-day suspension of Parliament. When Parliament resumed, some lawmakers carried signs and shouted slogans about the “Modi-Adani friendship” and the “Adani-led government.”
“Any report coming in from any corner of the world doesn’t deserve our attention,” said Jagdeep Dhankhar, speaker of the upper house of Parliament. He added, “We cannot give everybody the right to destabilize us like this.”
In response to the nationalist defense, Hindenburg issued a statement in late January saying, “We ... believe India’s future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation.”
Some commentators sought to distinguish between Adani and India as a whole. A television segment with Arnab Goswami, the star anchor of India’s top-rated news channel, Republic TV, had the title: “Adani Is Not India & India Is Not Adani.”
“The Adani Group equates the Hindenburg report to an attack on India,” Goswani said. “I’m not sure of that. However big a corporate group may be, you can’t equate the future of the fortunes of that corporate group with India.”
The Indian government in official statements has kept its distance from the controversy. Modi, speaking in Parliament, did not mention Adani. Finance Minister Nirmala Sitharaman said government institutional investors are “well within permissible limits” of exposure to the Adani Group.
Adani’s success has tracked Modi’s political ascent, and the prime minister’s policy priorities have been advanced by Adani’s business endeavors.
Corporations “are part of the government’s ambition and mission. Modi has been saying, ‘I want to build first-world infrastructure … and at the same time, deliver toilets. [Corporations] are my partners in that,’” said Damodaran, the business history writer.
Adani also has asserted that his success is India’s success. In a video address aimed at reassuring investors that their interests remained paramount, he signed off with a common Indian cheer: “Jai Hind” — “Long Live India.”
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