A Short Seller Takes Aim at an Indian Corporate Giant

A short seller is targeting the Indian billionaire Gautam Adani and his business empire.Credit…Rupak De Chowdhuri/Reuters

A short seller takes on Asia’s richest man

Hindenburg Research, the short seller that rose to prominence by going after unprofitable blank-check firms and crypto companies, is pursuing its biggest targets yet: the Indian conglomerate Adani Group and its billionaire founder, Gautam Adani, whom Forbes ranks as the world’s third-richest person.

Just as India’s stock market opened this morning, Hindenburg issued a lengthy report which claims that Adani pulled off “the largest con in corporate history.”

Hindenburg accused Adani Group of “a brazen stock manipulation and accounting fraud scheme” run over decades, partly through the use of a maze of shell companies. The firm noted that Adani Group had been investigated for corruption, money laundering and theft of taxpayer funds. (And for good measure, it said that seven Adani Group publicly traded companies were vastly overvalued, based on their financials.)

Hindenburg said it was shorting Adani Group companies — that is, betting their stock prices will fall — through U.S.-traded bonds and non-Indian-traded derivative instruments.

Shares inAdani Enterprises, the group’s flagship public firm, fell sharply on Wednesday,as did those of Ambuja Cements, which it recently acquired. The sell-off wiped out $9.4 billion in shareholder value.

Adani Group dismissed the allegations, accusing Hindenburg of timing the report’s release to sabotage a planned $2.5 billion stock sale set to open to investors on Friday. (The offer had drawn interest from Gulf-area investors.) In a statement, Adani Group called Hindenburg’s conclusions a “malicious combination of selective misinformation” and allegations that had “been tested and rejected by India’s highest courts.”

Hindenburg is taking on a billionaire regarded as Asia’s wealthiest mogul. Over four decades, Mr. Adani has assembled a business empire that runs from industrial companies to airports to solar energy to telecommunications. Partly thanks to landing lucrative government concessions, Mr. Adani has become a dominant player in developing the country’s infrastructure; his hostile bid for one of the country’s biggest media companies has heightened worries about his growing power.

Critics have said that he has benefited unfairly from his links to Prime Minister Narendra Modi. (Mr. Adani has been called “Modi’s Rockefeller.”) Since Modi came to office, Mr. Adani’s wealth has reportedly surged by more than 200 percent.

This investment will test Hindenburg’s strong run. The firm, founded by Nathan Anderson, was virtually unknown on Wall Street until 2020, when it raised evidence of fraud at Nikola, the once high-flying electric vehicle maker. That report became a central plank in federal prosecutors’ ultimately successful fraud case against the company’s founder, Trevor Milton.

Hindenburg’s tease of its Adani Group report on Twitter on Tuesday generated excitement among followers, who floated all manner of guesses and posted popcorn-munching memes — a far cry from the threats that often greeted pre-release announcements of reports by Hindenburg and other short sellers during the height of the SPAC market boom.


Ticketmaster gets bipartisan criticism over its dominance. Senators from both parties suggested at a hearing on Tuesday that the company was a monopoly, even as a senior executive from its parent company, Live Nation, apologized for its botched handling of ticket sales for Taylor Swift’s upcoming tour. Some lawmakers even suggested that Live Nation be broken up.

Microsoft warns of slowing sales growth. The tech giant reported its weakest growth in six years, as revenue for its latest quarter grew just 2 percent year on year. The company said the slowing economy was making corporate customers wary of buying new services — a challenge also cited by the likes of Salesforce. (Microsoft shares were down premarket.)

Germany will send tanks to Ukraine. The decision to send an initial batch of 14 Leopard 2 tanks came after weeks of pressure on Berlin, and follows U.S. officials saying the Biden administration will also ship M-1 Abrams tanks. A big question is how many vehicles are actually available to send.

The New York Stock Exchange grapples with fallout from Tuesday’s glitch. A software issue led to wild swings in over 250 stocks, including Nike and Verizon. The Big Board said it would reverse some trades and let member firms request compensation for losses tied to the problem, though undoing some transactions could affect sales on other exchanges.

Elon Musk wraps up his testimony in a Tesla fraud trial. The billionaire testified on Tuesday that he hadn’t gotten specific numbers from potential partners he said had been willing to invest in his efforts to take the carmaker private. Meanwhile, Tesla said it planned to spend $3.6 billion to expand a factory in Nevada; it’s also set to report earnings after market close on Wednesday.

Rupert Murdoch’s dream is deferred

Months after Rupert Murdoch pushed to combine two key parts of his media empire, Fox and News Corp, the billionaire put that plan on hold on Tuesday, calling it “not optimal” at this time. The decision is a win for the investors — and at least one Murdoch family member — who opposed the idea.

Murdoch wanted to put his marquee holdings together, assembling Fox News, The Wall Street Journal, the Fox TV network and TMZ under one roof. He was initially interested in potential cost savings and controlling a larger media company in an age when bigger is considered better: “Scale is important,” Lachlan Murdoch, Fox’s C.E.O. and Rupert Murdoch’s heir apparent, said in November.

But investors had concerns. In November, the activist investor Irenic Capital Management, a shareholder in News Corp, questioned whether the Fox deal would be better than alternatives like selling the company’s real estate business. And T. Rowe Price, the investment manager, told The Times that Rupert Murdoch’s plan would probably undervalue News Corp.

Even the Murdoch family, which controls about 40 percent of the vote at both Fox and News Corp, may not have been fully united: James Murdoch, Mr. Rupert’s younger son, wrote letters to the News Corp and Fox boards raising questions about the deal. (It’s unclear what those objections were.)

A new deal emerged instead. CoStar Group, which provides data and marketing services to the commercial real estate industry, expressed interest in buying News Corp’s stake in Move, which owns, at a valuation of over $3 billion, according to two people with knowledge of the move. Once discussions with CoStar became serious, efforts to unite News Corp and Fox were paused.

What now? If News Corp sells its real estate unit, it would be left with a smaller collection of businesses that could stand alone or be sold. Meanwhile, Fox may need to find another partner to achieve the scale its chief says is important — though buying another media outlet, like the conservative broadcaster Sinclair, could raise antitrust concerns.

“Everybody in the moment is trying to get out of the conversation — get it done quickly. It was all about ripping the Band-Aid off.”

Trip Barnes, a 39-year-old from Atlanta, describing what it’s like to be laid off as a remote worker.

Google’s regulatory headache gets worse

The Justice Department and eight states sued Google on Tuesday, accusing the tech giant of monopolizing the digital ad business by “engaging in a systematic campaign to seize control” of tools that form a crucial part of the $250 billion market.

The D.O.J. wants Google to sell much of its ad business. The suit accuses the company of anticompetitive behavior: gobbling up competitors, forcing advertisers to use its tools and manipulating auctions that are used to place ads across the internet. It wants the company to unwind its 2007 acquisition of the ad-serving company DoubleClick and to divest its ad exchange.

Google says the D.O.J. is “doubling down on a flawed argument.” In a blog post, Dan Taylor, its vice president of global ads, accused the government of picking “winners and losers” in a market that’s competitive. He added that the D.O.J. was trying to “rewrite history” by unwinding deals approved years ago.

Regulators are honing in on Big Tech. The case is the fifth antitrust lawsuit filed by U.S. officials against Google since 2020, and regulators in Europe have launched investigations of Google, Amazon and Apple.

Jonathan Kanter, the D.O.J.’s antitrust chief, on Tuesday quoted a comment by a Google ad executive in an internal company email to explain why its dominance was so problematic: “The analogy would be if Goldman or Citibank owned” the New York Stock Exchange, the executive wrote. (Of note: Google tried to block Mr. Kanter from antitrust investigations of the company based on his past statements and representation of competitors.)

Ex-regulators say the new case could slow the government down elsewhere. The Eastern District of Virginia, where the D.O.J. filed its suit, is known as the “rocket docket” because cases typically proceed quickly there. But former regulators told DealBook that the new suit may raise timing issues. A case in federal court in D.C. that stems from a 2020 complaint by the D.O.J. that Google abused its dominance over online search is set to go to trial next fall.

The D.O.J. said the cases cover different markets, but some lawyers believe Google could try to link the legal battles, if only to throw a procedural wrench into the government’s agenda.



  • Bob Iger and Henry Kravis are among the investors that have taken a minority stake in Thrive Capital, Joshua Kushner’s venture capital firm, at a $5.3 billion valuation. (WSJ)

  • Barclays named Cathal Deasy, the former Credit Suisse deal-maker, and Taylor Wright, its co-head of global capital markets, as its co-heads of investment banking. (Reuters)

  • Justin Bieber has sold his music catalog, reportedly at a $200 million valuation, to a Blackstone-backed intellectual-property investment venture. (Bloomberg)


  • New questions have emerged about the six-figure loans that George Santos gave to his congressional campaign. (NYT)

  • France’s data protection chief opposes using facial recognition technology at the 2024 Paris Olympics. (Politico)

Best of the rest

  • Walmart is raising minimum wages for store workers to a range of $14 to $19 an hour, up from $12 to $18 an hour. (NYT)

  • Apple is reportedly focusing on improvements to native iOS apps like maps to better compete against Google’s offerings. (FT)

  • Agents on America’s southern border are increasingly finding a new kind of contraband from Mexico: eggs. (NYT)

We’d like your feedback! Please email thoughts and suggestions to [email protected].

Related Articles

Back to top button