Even as the Modi government was grappling with the impact of the two-part BBC documentary on the Modi Question, Modi’s closest corporate ally Gautam Adani found himself in the eye of the Hindenburg hurricane. On 24 January while the world eagerly awaited the second episode of the BBC documentary, the US-based Hindenburg Research came out with its report titled Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History. The 100-page report – backed, according to the Hindenburg group, by two years of thorough research – accused the Adani group of brazen stock manipulation, accounting fraud and money laundering, and triggered a massive crash in Adani’s share prices. By 30 January Adani group’s net worth had fallen by close to $70 billion, with the tycoon himself losing $36 billion of personal wealth to drop from the third position in the world’s richest list down to the eleventh slot.
In response to the 100-page Hindenburg report, the Adani group has issued a 413-page ‘rebuttal’, describing the report as ‘a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India’. Adani group’s Chief Financial Officer has even gone on to compare Indian investors selling Adani shares in the wake of the Hindenburg report to Indian policemen who had killed Indians in Jallianwala Bagh to carry out an Englishman’s order! Adani’s response to the Hindenburg report is thus quite similar to Modi government’s response to the BBC documentary. The only difference is while the Modi government invoked Emergency powers under its IT Act to block the video on Indian social media, Adani has no such powers to stop investors from selling his shares!
What the Hindenburg Research group does to expose corporate wrongdoing is akin to what investigative journalists do to expose crime and corruption through sting operations. The group calls it ‘forensic financial research’. Founded in 2017, the group has so far published more than a dozen investigative reports and the companies investigated have been mostly American. The Adani group is in fact the first Indian company to be investigated by Hindenburg Research and accusing the report of mounting an attack on India only reveals the Adani group’s desperation to use nationalism as a protective shield.
The meteoric rise of the Adani group in the Modi era has been a classic case of crony capitalism. Adani has always had his way to secure any amount of loans from Indian banks and financial institutions and grab India’s infrastructural assets and even global contracts at will. Within India he has been flexing his financial and political muscles to silence every investigation and threaten every writer with defamation, even going to the extent of buying off the only TV channel that used to carry some critical news about the Modi government’s monumental economic failure and betrayal and relentless assault on the composite culture and constitutional framework of India. Now faced with a damning report and an alarming crash, Adani is trying to save himself by equating his economic empire with India’s national interest and pride.
The Hindenburg report’s accusations against the Adani group’s corporate malfeasance demand an immediate response from the Modi government. How can India’s regulatory institutions like RBI and SEBI keep quiet in the face of such detailed and damning report of corporate fraud? India’s biggest banks and financial institutions like SBI and LICI have loaned out huge sums to the Adani group and as a result of the crash, the LIC has already seen a major erosion in its holdings in the Adani group. These institutions are among the biggest repositories of the hard-earned savings and pension funds of the common people, yet instead of saving the common Indian’s interest these institutions are being used to bail out the Adani group.
The interests of the common people and the interests of the Indian economy cannot be mortgaged to the fraudulent business interests of crony capitalists like Gautam Adani. The word Hindenburg refers to the Hindenburg airship disaster on May 6, 1937 when a Hydrogen-filled German airship, named after German President Paul von Hindenburg who had appointed Hitler as Chancellor of Germany, had caught fire while landing in America. As many as thirty-five passengers and crew members had perished in that disaster and the research group uses the name Hindenburg as a metaphor for an avoidable man-made disaster. The Modi regime has truly been a reign of serial disasters. India must not allow the Modi-Adani axis to seek opportunity in this latest disaster. It is time to insist on answers and accountability.
