Adani Group: the global ripples of an Indian crisis
The New York hedge fund Hindenburg Research, named after the doomed German airship, was founded by Nathan Anderson in 2017 “to hunt for impending corporate disasters and then hold a torch to them”, said The Economist. Boy, did it achieve a big bang with Adani, India’s leading industrial conglomerate. Within ten days of “the Adanirattler” getting into action, share losses at the group had exceeded $100bn, forcing it to abandon a $2.4bn share sale. And ripples from the crisis had begun spreading globally.
In London, Lord (Jo) Johnson, brother of the former PM, resigned from the board of Elara
Capital – an investment bank accused by Hindenburg of “using Mauritius-based funds to manipulate the share price of Adani-linked companies and obscure their ultimate ownership”, said Rupert Neate in The Guardian. Meanwhile, the French energy giant TotalEnergies admitted it had a $3.1bn exposure to outfits including the stricken Adani Total Gas and Adani Green Energy. Total said it welcomed plans to appoint a “Big Four” accountant to audit Adani. One can see why, said the FT. In its report, Hindenburg highlighted the use of “a tiny firm” in India as one of the behemoth’s main auditors. Last year, Adani “shifted the audit of its British subsidiaries” from Deloitte to the UK’s 12th largest firm, Crowe UK.
Still, the biggest fallout from the collapse is in India, where several of the largest banks are exposed to Adani Group debt, said The Times. Opposition MPs have called for an inquiry into what one called “Adani’s mountain of lies and fraud” – and for particular “light to be shed” on whether the Modi government “forced” state-owned banks to invest because of the PM’s friendship with founder Gautam Adani. This one could run and run.