Adani Group Value Plummets After Allegations

The Adani Group, an Indian conglomerate, experienced a significant share selloff on Monday, losing approximately $2.4 billion in market value after Hindenburg Research accused the head of India’s market regulator, Madhabi Puri Buch, of having ties to offshore funds linked to the group. This selloff marked a recovery from earlier losses exceeding $13 billion. The ongoing conflict between Hindenburg and Adani began 18 months ago when the U.S. shortseller alleged the conglomerate misused tax havens, claims that Adani has consistently denied. Hindenburg's latest allegations, based on whistleblower documents, suggest a conflict of interest for Buch due to her previous investments. In response, Buch labeled the accusations as baseless, and the Securities and Exchange Board of India (SEBI) stated that prior allegations against Adani had been thoroughly investigated. On Monday, shares of Adani Enterprises fell by 1.1%, while other Adani companies saw declines ranging from 0.6% to 4.2%. Only Adani Green managed to close 1% higher. Despite the turmoil, investments from firms like Abu Dhabi's International Holding and U.S.-based GQG Partners have helped restore some investor confidence, reducing Adani's share value losses from $150 billion to about $32.5 billion since the initial Hindenburg report. Analysts predict a short- to medium-term impact on Adani stocks, particularly affecting retail investors. Political reactions have intensified, with ruling party lawmaker Ravi Shankar Prasad dismissing Hindenburg's report as a baseless attack, while opposition leader Rahul Gandhi expressed concerns over the integrity of SEBI, emphasizing the need for trust in the regulator tasked with protecting retail investors.