Interesting that the top comment of the thread you posted attempts to minimize Adani's culpability.
It reminds me when the FTX story broke Coindesk and was posted to HN. The top commenter there was trying to convince everyone there's nothing to see and the concerns were overly dramatic.
I had a tiny investment in ADANIENT stock that I sold the moment I read about the Hindenburg report. So, I contributed to the $45B!
The thing is Indian business environment is a big of a quagmire. It significantly helps that the legal system is wildly inefficient (and prone to influence by the powerful). Just look at the famous scandals and the frauds that got away with it…
The thing is the market regulator is still holding the cards. If any of these allegations are proven true, the key question would be whether the regulator failed at their job or worse colluded to let it happen. If so, it’s be a disaster for the Indian stock market. If not, I suppose frauds being frauds I guess.
"If any of these allegations are proven true" - most of them are not allegations, they have quoted facts which are publicly verifyable. Other points are just massive red flags or questions. Examples -
- Rajesh Adani, was accused by the Directorate of Revenue Intelligence (DRI) of playing a central role in a diamond trading import/export scheme around 2004-2005. He was subsequently arrested twice over allegations of customs tax evasion, forging import documentation and illegal coal imports. Given his history, why was he subsequently promoted to serve as Managing Director at the Adani Group?
- The independent auditor for Adani Enterprises and Adani Gas is a tiny firm called Shah Dhandharia. Historical archives of its website show that it had only 4 partners and 11 employees.
- Offshore entities hold concentrated positions in Adani stocks, they accounted for up to 30%-47% of the yearly delivery volume in Adani stocks, a massive irregularity.
- Publicly listed companies in India are subject to rules that require all promoter holdings (known as insider holdings in the U.S.) to be disclosed. Rules also require that listed companies have at least 25% of the float held by non-promoters in order to mitigate manipulation and insider trading. 4 of Adani’s listed companies are on the brink of the delisting threshold due to high promoter ownership.
- Elara, a firm with almost $3 billion in concentrated holdings of Adani shares, including a fund that is 99% concentrated in shares of Adani. Leaked emails show that the CEO of Elara had dealings with notorious stock manipulator Dharmesh Doshi, partner of Ketan Parekh, even after Doshi became a fugitive for his alleged manipulation activity. How does Adani respond to this relationship, given that Elara is one of the largest “public” holders of shares of Adani?
The facts are almost certainly true. The only question is whether the Adani's business losses can be compensated by the government's inevitable effort to make the Adani businesses whole and even richer.
The Adani group is little more than a funnel to the Indian political class in power right now.
To be completely fair, this may even be a better corruption model than that followed by previous governments since the fact that they are listed means they actually do make efforts to deliver something which leads to some money being used productively, whereas earlier corruption models involving paying government officials off directly often resulted in none of that money being used productively.
i do legal compliance/litigation for indian businesses.
there are a couple of things at play here (talking about small business)
1. taxes and compliance is VERY VERY HARSH because the govt expects people to fuck them over taxes.
2. people DO fuck the govt over taxes. there is a normal parallel cash economy that saves a tonne of indirect taxes at the start and direct income tax at the end of the financial year.
3. businesses have this concept of "why should we pay for compliance/ books and have that work as evidence against us if things go south when we can just bribe the investigating officer and our job will be done.\
4. for the most part, "paper" is king. online works for most part but because of technical inefficiencies, paper is allowed and that makes bribery a viable solution.
5. i know of a guy in delhi-ncr who apparently advertises that he "has contacts with all the GST departments of the area and if you have any problem with the department and you need settlement, you call me. ". He recently bragged to one of his teachers about earning "1 lac a day doing this broker job".
6. there is never ending cycle of businesses finding ways to steal tax money, govt finding out and plugging them and the cycle starts again. this has the unintended consequence of a genuine business owner sees no "value" in being genuine when it actually saves them cash.
7. we do audits but i know what kind of stuff we check so being an auditor, i do not "trust" an audit report of another auditor so you can say that about the profession. ( this applies to big and small businesses the same)
8. every party is greedy and the other party knows and tries to fuck one another. that is the gist of it.
9. "meteoric rise" is absolute bullshit.
10. people "hope" that people like adani are better because they have a tonne of money so they should be better than us so we should fuck with out customers/suppliers/employees/govt because that is the only way to become like that guy.
11. everyone has known that adani is being helped by modi govt, same for reliance but no one sees that as a risk.
12. you join BJP, "all your sins will be washed away". i have seen that in a lot of places on the streets.
[+] [-] SeanAnderson|3 years ago|reply
The market appears to be agreeing with their analysis. In the past day Adani is down nearly 20% against a >3T market cap.
It will be very interesting to see how this affects overall confidence in India's markets going forward.
[+] [-] hitekker|3 years ago|reply
It reminds me when the FTX story broke Coindesk and was posted to HN. The top commenter there was trying to convince everyone there's nothing to see and the concerns were overly dramatic.
[+] [-] reacharavindh|3 years ago|reply
The thing is Indian business environment is a big of a quagmire. It significantly helps that the legal system is wildly inefficient (and prone to influence by the powerful). Just look at the famous scandals and the frauds that got away with it…
The thing is the market regulator is still holding the cards. If any of these allegations are proven true, the key question would be whether the regulator failed at their job or worse colluded to let it happen. If so, it’s be a disaster for the Indian stock market. If not, I suppose frauds being frauds I guess.
[+] [-] rockyj|3 years ago|reply
- Rajesh Adani, was accused by the Directorate of Revenue Intelligence (DRI) of playing a central role in a diamond trading import/export scheme around 2004-2005. He was subsequently arrested twice over allegations of customs tax evasion, forging import documentation and illegal coal imports. Given his history, why was he subsequently promoted to serve as Managing Director at the Adani Group?
- The independent auditor for Adani Enterprises and Adani Gas is a tiny firm called Shah Dhandharia. Historical archives of its website show that it had only 4 partners and 11 employees.
- Offshore entities hold concentrated positions in Adani stocks, they accounted for up to 30%-47% of the yearly delivery volume in Adani stocks, a massive irregularity.
- Publicly listed companies in India are subject to rules that require all promoter holdings (known as insider holdings in the U.S.) to be disclosed. Rules also require that listed companies have at least 25% of the float held by non-promoters in order to mitigate manipulation and insider trading. 4 of Adani’s listed companies are on the brink of the delisting threshold due to high promoter ownership.
- Elara, a firm with almost $3 billion in concentrated holdings of Adani shares, including a fund that is 99% concentrated in shares of Adani. Leaked emails show that the CEO of Elara had dealings with notorious stock manipulator Dharmesh Doshi, partner of Ketan Parekh, even after Doshi became a fugitive for his alleged manipulation activity. How does Adani respond to this relationship, given that Elara is one of the largest “public” holders of shares of Adani?
[+] [-] asdajksah2123|3 years ago|reply
The Adani group is little more than a funnel to the Indian political class in power right now.
To be completely fair, this may even be a better corruption model than that followed by previous governments since the fact that they are listed means they actually do make efforts to deliver something which leads to some money being used productively, whereas earlier corruption models involving paying government officials off directly often resulted in none of that money being used productively.
[+] [-] 2Gkashmiri|3 years ago|reply
1. taxes and compliance is VERY VERY HARSH because the govt expects people to fuck them over taxes.
2. people DO fuck the govt over taxes. there is a normal parallel cash economy that saves a tonne of indirect taxes at the start and direct income tax at the end of the financial year.
3. businesses have this concept of "why should we pay for compliance/ books and have that work as evidence against us if things go south when we can just bribe the investigating officer and our job will be done.\
4. for the most part, "paper" is king. online works for most part but because of technical inefficiencies, paper is allowed and that makes bribery a viable solution.
5. i know of a guy in delhi-ncr who apparently advertises that he "has contacts with all the GST departments of the area and if you have any problem with the department and you need settlement, you call me. ". He recently bragged to one of his teachers about earning "1 lac a day doing this broker job".
6. there is never ending cycle of businesses finding ways to steal tax money, govt finding out and plugging them and the cycle starts again. this has the unintended consequence of a genuine business owner sees no "value" in being genuine when it actually saves them cash.
7. we do audits but i know what kind of stuff we check so being an auditor, i do not "trust" an audit report of another auditor so you can say that about the profession. ( this applies to big and small businesses the same)
8. every party is greedy and the other party knows and tries to fuck one another. that is the gist of it.
9. "meteoric rise" is absolute bullshit.
10. people "hope" that people like adani are better because they have a tonne of money so they should be better than us so we should fuck with out customers/suppliers/employees/govt because that is the only way to become like that guy.
11. everyone has known that adani is being helped by modi govt, same for reliance but no one sees that as a risk.
12. you join BJP, "all your sins will be washed away". i have seen that in a lot of places on the streets.
i don't know... i am ranting
[+] [-] zxienin|3 years ago|reply
This rout directly benefits their short position.
Invest 2 year to create enough mayhem in market, to cash your chips. Not bad for a business model.
[+] [-] known|3 years ago|reply
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[+] [-] ilrwbwrkhv|3 years ago|reply
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[+] [-] jonwachob91|3 years ago|reply
[+] [-] MomoXenosaga|3 years ago|reply
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