The Adani Group whose affiliate company Adani Airports Holdings is pursuing a takeover deal for the Jomo Kenyatta International Airport (JKIA) has been rocked by a fresh fraud scandal.

This is after Hindenburg Research accused the head of India’s market regulator of having a conflict of interest that prevented thorough investigations into fraud involving the Adani Group.

The fresh accusations against the India regulator and the Adani Group resulted in a massive sell off for the Adani Group stock on Monday August 12, 2024.

According to a spot check by Bloomberg, shares of the group’s flagship – Adani Enterprises Limited – lost USD2.43 billion at the end of the day’s trading. Earlier on, the shares had lost as much as USD13 billion.

According to a report that was published by the Hindenburg Research on Saturday, August 10, 2024, Madhabi Puri Buch, who is the chairperson of the Securities Exchange Board of India, and her husband, Dhaval Buch, had invested in offshore entities that were allegedly part of a fund structure in which Vinod Adani, who is the brother of billionaire Gautam Adani, also had investments.

According to a Bloomberg report, the latest allegations come as Adani Group goes on a fundraising drive. “[In early August], Adani Energy raised USD1 billion selling shares to institutions. The group’s flagship is considering raising USD1.2 billion,” the Bloomberg reported.

It added that last year, Adani scrapped a share sale that was worth USD2.4 billion amidst a stock meltdown that followed the Hindenburg report in which Adani Group was confronted with various fraudulent allegations.

In an earlier report, Hindenburg Research had stated that family members of the Adani family have used offshore shell companies to create illegitimate revenue for the mother company, and siphon money from the mother company’s publicly listed arms.

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Hindenburg had labeled Adani Group as the largest con in corporate history, and claimed that the conglomerate had engaged in a long-running stock manipulation and accounting fraud scheme, accusations that Adani denied.

“Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades,” the Hindenburg Research had claimed. “

“We [have] identified 38 Mauritius shell entities controlled by Vinod Adani or close associates. We [have] identified entities that are also surreptitiously controlled by Vinod Adani in Cyprus, the UAE, Singapore, and several Caribbean Islands.”

According to a related report that was published by Al Jazeera, Hindenburg Research had in January 2023 questioned how Adani used offshore entities in offshore tax havens [such as Mauritius and the Caribbean Islands]. Hindenburg had further claimed that offshore funds and shell companies that were tied to Adani secretively owned stock in Adani listed firms.

In addition, the Al Jazeera had quoted Hindenburg as stating that the Adani companies had substantial debt which had put the entire group on a precarious financial footing. “Seven of the Adani listed companies had an 85 per cent downside on a fundamental basis due to what was termed as sky-high valuations,'” Al Jazeera quoted.

A report published by Hindenburg had gone on to claim that many of the Vinod Adani-associated entities have no obvious signs of operations, including no reported employees, no independent addresses or phone numbers and no meaningful online presence.

“Despite this, they have collectively moved billions of dollars into Indian Adani publicly listed and private entities, often without required disclosure of the related party nature of the deals,” the report had alleged.

“We […] uncovered rudimentary efforts seemingly designed to mask the nature of some of the shell entities… 13 websites were created for Vinod Adani-associated entities; many were suspiciously formed on the same days, featuring only stock photos, naming no actual employees and listing the same set of nonsensical services, such as ‘consumption abroad’ and ‘commercial presence’,” the report had alleged. Adani Group denied the allegations.