Carmichael coal mine parent company Adani Enterprises to refund $2.5 billion share offer amid fraud and corruption allegations 

After days of falling stocks which have wiped USD$92 billion from Adani Group’s market share following allegations of “brazen stock manipulation and accounting fraud” by Hindenburg Research, Adani Enterprises has cancelled its US$2.5 billion share issuance in a move which has shocked the market. The Hindenburg Report alleged a “vast labyrinth of offshore shell entities” ultimately owned by The Adani Group to launder money and manipulate stock prices. 

On January 31st, Adani Enterprises announced its Follow on Public Offer (FPO) was a success. The following day Adani announced it will cancel the FPO and return the money to its investors. The cancellation announcement came after Forbes suggested Adani Enterprises could have used two of the same offshore shell companies exposed in the Hindenburg Report to buy into its own $2.5 billion share offer. 

Adani Enterprises was seeking to raise billions to pay debt and fund its pipeline of projects, including the Carmichael mine. Adani is the world’s largest private developer of new coal mines, according to Global Energy Monitor. Adani Enterprises is the parent company funding Adani’s Carmichael coal mine, and has purchased at least 8 massive new coal mines in India just in the last two years. Adani is also proposing the world’s biggest coal-to-plastics plant, a highly polluting process. 

The Hindenburg Report could have impacts on Adani’s coal empire beyond the world of finance:

• The Australian corporate regulator ASIC is reportedly reviewing a series of suspicious transactions connected to Adani’s Australian business. 
• The Government of Bangladesh is reportedly seeking a revision to the agreement it signed with Adani Power to purchase electricity from its Godda coal station, over concerns it is being overcharged for coal from Adani’s Carmichael mine. 
• The increased scrutiny from regulators and investors raises serious questions about the viability of Adani’s Carmichael coal mine, which only started exporting small amounts of coal in 2022 after 8 years of delays amid fierce resistance from Traditional Owners and the #StopAdani movement.

The #StopAdani movement, frontline Indigenous communities, and environmental and human rights advocates have been warning about Adani’s dodgy corporate behaviour for years, and have been calling on investors to steer clear of Adani due to their disregard of the environment, climate change and Indigenous land rights. 

Nick Haines, Toxic Bonds campaigner at Sum Of Us said “Those who have followed Adani, who have fought them and campaigned for greater scrutiny of their activities, have been sounding the alarm for years. What we are seeing is the market catching up. It turns out companies that are willing to lie to Indigenous communities, to regulators and to the media are also happy to lie to investors.

“The focus now must turn to the pillars of the global investment world - Blackrock, TIAA, PIMCO and others - the firms who have bankrolled Adani’s coal expansion to date. They must explain what they will do with the millions in Adani stock and bonds they still hold and to rule out participation in the further $10 billion debt raising Adani has planned this year.”

Coedie McAvoy (aka Gurridyula Gaba Wunngu), Wangan and Jagalingou Cultural Custodian, said “Our people have said No to Adani from the beginning and we’ve been warning politicians and investors that Adani is a dirty and destructive company with no respect for our human rights. 

“We’ve been here on Adani’s Carmichael mining lease for 526 days defending our culture and defying Adani’s destruction of our ancestral lands and waters. 

“Now that Hindenburg has accused Adani of the biggest con in corporate history, investors need to wake up, stop funding the destruction of our country, and pull out of all Adani companies now.”

Further information:

Market Forces briefing on Adani’s massive fossil fuel expansion plans

AdaniWatch brief on conflicts related to Adani’s Indian coal projects

High quality stills and video available for use.  

Background: What does the Hindenburg Report say?

The Hindenburg Report lays out detailed evidence of “brazen accounting fraud, stock manipulation and money laundering” that they say accounts to “one of, if not the most egregious example of corporate fraud in history.”

Some of the report’s most damning findings include evidence of:

• • Stock manipulation and money laundering. “Vinod Adani, through several close associates, manages a vast labyrinth of offshore shell entities… The Vinod-Adani shells seem to serve several functions, including (1) stock parking / stock manipulation (2) and laundering money through Adani’s private companies onto the listed companies’ balance sheets in order to maintain the appearance of financial health and solvency.”
  • Fraud. “The Adani Group has previously been the focus of 4 major government fraud investigations which have alleged money laundering, theft of taxpayer funds and corruption, totaling an estimated U.S. $17 billion.”
  • Accounting irregularities and bogus audits. “Adani Group’s obvious accounting irregularities and sketchy dealings seem to be enabled by virtually non-existent financial controls…The independent auditor for Adani Enterprises and Adani Total Gas is a tiny firm called Shah Dhandharia. Shah Dhandharia seems to have no current website. Historical archives of its website show that it had only 4 partners and 11 employees…Shah Dhandharia hardly seems capable of complex audit work. Adani Enterprises alone has 156 subsidiaries and many more joint ventures and affiliates, for example.”

ASIC is reported to be reviewing allegations related to Adani’s Carmichael Coal Project, which include:

• “In 2013-2015, Carmichael Rail and Port Singapore Holdings Pte. Ltd, a Singaporean entity controlled solely by Vinod Adani, [Pg. 2] engaged in a series of 3 transactions that may have resulted in Adani Enterprises avoiding recognition of large asset impairment charges.”
• An entity owned by an Adani Private Family Trust in a Caribbean tax haven charged publicly listed Adani Enterprises a US $100 million upfront security deposit to use Adani’s NQXT (Abbot Point) coal terminal in Australia. “It is unclear why an Adani private entity is charging the Adani Group listed company for port handling services in yet another conflicted transaction, drawing capital out of the public company.”
• Hindenburg questions why Gautam Adani’s brother-in-law Samir Vora was promoted to the role Adani Australia Executive Director after being accused of being the ringleader of a diamond trading scam and of repeatedly making false statements to regulators.