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Old 28th January 2023, 11:10   #106
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

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Originally Posted by amit1agrawal View Post
Keeping aside how good or bad the Adani group is, If Hindenburg was here to change the world with their honest research, then they should not be in the business of short-selling. Period. The timing also makes me suspicious of their real intent.
Hindenburg does not claim to be social service organization. I don’t understand this kind of meaningless aversion to firms like Hindenburg by many in his thread . If they didn’t exist, there would be a lot more bankrupt retail investors in this world. They do their research, generate a sort of intellectual property and make money out of it. Isn’t it what all legitimate business is about? So why the hate? They aren’t spinning any conspiracy theories. It’s up to people to decide if they want to use their research outcome or not.

Last edited by Theyota : 28th January 2023 at 11:11.
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Old 28th January 2023, 11:13   #107
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

My two cents on the topic,
As an Economics student, I was tempted to read this Report, To find out whether we really have a Scam 2023 at our hands.
But what I found out was, Hindenburg has a history of spreading such rumours, to benefit financially.

Even though Adani group’s 280 bn valuation is bloated to a large extent, but its reason is stock market sentiments, rather than stock manipulation, Adani is a name that became connected to wealth in the last 3 years that was due to the group’s investment in renewable energy and ports.

Let me talk about another such example, Tesla, an electric car manufacturer with sales less than half of that of Toyota, but valuation reaching 1 trillion, less than two years ago on the basis of stock market sentiments, future expectations, etc
The market valuation of Tesla has fallen to around 550 bn which is still far above its actual worth considering its sales and assets.

Even though the Adani group’s valuation is bloated it does not mean they are wrong in their practices, they are just reliance group on steroids. They are involved in multiple industries and most of the questions raised by Hindenburg are common practices worldwide.

But this is an interesting instance, let’s see Adani group’s course of action on this.

Cheers
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Old 28th January 2023, 11:32   #108
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

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Originally Posted by Siddarth_Ramani View Post

Hindenburg has 88 questions and I have only one. Why can't a 280 billion dollar company afford Big4 audit fees?
To add to this, how did a company as large as Adani get their audit report signed off by a couple of CAs who were only 23-24 years of age?
Coming from a similar professional background, how it normally works is that the size of the auditee is directly proportional to the experience of the auditor signing off the report. 20 something year olds signing the report is unheard of, they sure do assist the audit procedures as you pointed out but almost never sign off the final report. It is common knowledge that once a CA signs off on the reports, s/he is liable to be responsible should anything go wrong. In this case, what I understand is that Adani just got someone who would sign off the reports despite knowing very well that the numbers are fudged. No Big 4 would do that easily. Believe it is pretty clear that they wanted someone who could give them a favorable report. It was never about the fees. Surprising how the investors never questioned the appointment of a fairly small and nondescript practice as their auditors.
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Old 28th January 2023, 11:45   #109
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

Today, after reading the report, 'would you invest in an Adani stock at these lower prices' - is something I would like to know please?
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Originally Posted by W16rocks View Post
But what I found out was, Hindenburg has a history of spreading such rumours, to benefit financially.
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Old 28th January 2023, 12:05   #110
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

Don't understand why people are harping on Hindenberg's short position.

Indians, don't seem to understand the colour grey it seems. Not everything is going to be black and white guys. Calm down.

The real question is whether what Hindenberg alleges is true or not?
If it is true, then Adani is the problem, not Hindenberg. If their allegations are false then the opposite holds true.

Hindenberg is no saint. They couldn't give two hoots about the world being a better place or the markets being better monitored or even businesses being better scrutinised.
Hell, they make money when loopholes are exploited so that they can come along and point out the exploitation.
They do research, which shocking as it may seem to you, costs money. They make this money back through their stock positions. They are not a non-profit.

In a way, what they do is good. They highlight issues.
Now, can you leave your own intellect behind and trust everything they say? Absolutely not! Let's not be so lazy about it.
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Old 28th January 2023, 12:19   #111
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

MSCI seeks feedback on Adani Group and associated securities & is aware of the reports recently published regarding the group.

MSCI is closely monitoring publicly available information regarding the situation.

All Adani group stocks barring Adani Wilmar are in #MSCI Global Standard Index and also FTSE Indices.

US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history-fnhyg_aqae9dbj.jpg

US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history-fniptckakaedbb9.jpg
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Old 28th January 2023, 12:38   #112
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

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Originally Posted by Sebring View Post
Today, after reading the report, 'would you invest in an Adani stock at these lower prices' - is something I would like to know please?
As I wrote above I always found Adani group's valuation bloated, but now with a fall in its stock prices I will wait for 3-4 days and then buy its stocks as this fall is temporary, as soon as Adani group gives a satisfactory response people will again start buying, it’s all about bulls and bears, and with a sharp fall in prices of stocks it’s time to be a bull, Adani group has some very lucrative future investments in renewable energy, Airports and ports also now it has acquired some successful brands too.

Last edited by W16rocks : 28th January 2023 at 12:40.
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Old 28th January 2023, 13:06   #113
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

Two things that i found hard to believe:

1. It took so much time for the truth to come out.
2. Why this thread has 8 pages and 112 replies (and counting) when point no 1 seems so obvious.
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Old 28th January 2023, 13:08   #114
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

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Originally Posted by W16rocks View Post
As I wrote above I always found Adani group's valuation bloated, but now with a fall in its stock prices I will wait for 3-4 days and then buy its stocks as this fall is temporary, as soon as Adani group gives a satisfactory response people will again start buying.
Well, I have already started this, have no patience to wait for 3-4 days,

Started exactly since the afternoon session yesterday, and will observe for the coming sessions, to add more.

The infra boost will surely help the adani stocks in the future. The reports will come and go, treat these instances as opportunity for retail investors to enter the market or build more.
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Old 28th January 2023, 13:21   #115
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

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Originally Posted by Theyota View Post
Hindenburg does not claim to be social service organization. I don’t understand this kind of meaningless aversion to firms like Hindenburg by many in his thread . If they didn’t exist, there would be a lot more bankrupt retail investors in this world. They do their research, generate a sort of intellectual property and make money out of it. Isn’t it what all legitimate business is about? So why the hate? They aren’t spinning any conspiracy theories. It’s up to people to decide if they want to use their research outcome or not.
Exactly, as they are not here just to change the world & save innocent investors, we should be taking their report with a pinch of salt. By the way, what about those gullible investors who lost their share of investment due to Rs 48000 crores already being wiped out from Adani's shares while Hindenburg made some handsome money? I am not here to defend either Adani or Hindenburg but I think we are not putting this company & its real intentions behind it in the dock as much as Adani. In journalism (and more in research), it's fair to seek a response from the party against whom you are going to publish the damning report. If they want their research to be credible & not get questionable, they should not be doing any business which comes in direct conflict with their research. There looks like some political motive behind this also which I cannot post due to forum rules here. Googling will reveal that Hindenburg is no saint.
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Old 28th January 2023, 13:23   #116
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

Thanks a ton to all for this top class discussion on the subject. Me an elementary grade student has gained atleast Bachelor's level knowledge.

If I were to sum up my understanding, its a classic episode of " choron ko pad gaye mor".

Yes Adani group is not finished and will not coz of this but its a ship which has got tarpedoed on the high seas that too in its engine room. Its going to limp for a considerable period of time. Help from close quarters is only going to be to the extent to keep it afloat, dance of democracy is only 12 months away.

What happens to our infra story, Adani, IL&FS, JP, and so many others have hit glory and gone too fast. Any pointers to what is going wrong here.

Last edited by PGA : 28th January 2023 at 13:26.
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Old 28th January 2023, 13:27   #117
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

Neither invested nor a fan of Adani but let me state some facts.

In every developing economy which has become developed has seen family run opaque business help the country grow. Samsung and Hyundai from S Korea are an example.

1. New big electricity transmission towers have been set up across the country.
2. Last year when India needed electricity during peak season when the whole world was facing blackouts including China, Adani produced 2x amount of power through coal fired plants. He owns Carmichael mine in Australia too and it helps in India's energy security. Nobody likes to fund coal based power plants anymore.
3. Airports, ports and other infrastructure projects, whenever govt of India needed money, Adani group provided it. It owns a port in Israel not far from Suez Canal. Strategic asset for India

Betting against Adani group is like betting against Make in India as infrastructure and energy are critical for manufacturing.

Hidenburg is not widely known even in Manhattan financial circles. And when he said BIGGEST CON IN CORPORATE WORLD, he gave it away by showing his desperation to settle his position. Don't forget the offensive declaration happened just before FPO which would have made sure hindenburg loses his bet. I won't be surprised if next week we get to know that hidenburg has squared off his positions. Always take shorters words with a bag of salt.

In short, the hidenburg report said, Adani group private companies money was transferred to Adani group listed companies to inflate the stock price to get higher debt to invest in listed companies projects. And in doing all this several laws were broken. All the information was already in public domain.
Whose jurisdiction is to investigate the laws?

Almost same thing happened in July 2021, the only difference that nobody said that they have shorted.

Let's say Adani is manipulating the stock but whole India is benefitting from that but what if hindenburg is manipulating the report, whose set to gain USA, India or hidenburg?

Last edited by Tucker48 : 28th January 2023 at 13:29.
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Old 28th January 2023, 13:40   #118
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

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Originally Posted by Sran View Post
Is there any law that says only big 4 can audit big companies? Hindenburg itself is a small research company with less than 10 employees. Then there are people who are singing praises for how the big 4 have ideals and best hiring practices

I do not know what personal grudge you have against Big4s, I request you to read my post again, I did not sing praises on hiring practice of Big4s. I was just explaining the multiple redundancies that are present to catch hold of such accounting creativity. Sure you did quote few instances where Big4s failed to catch hold of the frauds. Did you also research on how many mis-representations that were found out by Big4s? I'm sure you did not since your post looks like it was written to discredit Big4s. If you have time, I would request you to read the Hindenburg report itself where Ernst & Young had reported on (Adani Power if I'm not wrong) that there was no basis for carrying value of one of the power plants worth $700 millions. I would further request you to research more on International Auditing standards, where it is clearly defined that Auditor's duty is not detecting fraud, but to give a reasonable assurance that financial statements are free from material mis-statement. Fraud detection is the duty of forensic auditor, who go in with 100% confidence that a fraud has occurred. We cannot work with that assumption, neither we have the power to do so, read more on auditor's powers & limitations.

Again I was not singing praises on Big4s, If anything even I do not like Big4. I myself had made very clear in my post that 20 year olds are not the problem since CA as a professional exam is one of the most rigorous exams in the world. Unlike many competitive exams in India, we do not have reservations too. Every one has to go through the same syllabus, the same exams and have to get the same minimum marks. ICAI simply does not care if your parents are presidents or vegetable vendors (no mercy) or belong to a particular caste. You have to pass all of the subjects at once. Even if you flunk a subject you have to write the entire group again if you don't have an exemption. So my concern was not the 23-24 year olds since every CA is competent enough to do their job. Again I'm not singing praises about my profession, I can give a laundry list of frauds committed by our fraternity. One extreme case was an article (19 Year old) who committed a 400Cr GST input tax credit scam and his principal was not even aware of it.

My concern was the redundancies, you cannot simply buy your audit report in Big4s, sure there were some cases as you quoted, but for that to happen, Trainees, consultants, Assistant Managers, Managers, Associate Directors, Directors and finally the Partners should be equally willing to do an illegal task. Since each one of them are taught about the consequences right from the beginning, it is astronomically much less likely to happen in Big4s compared to a small, virtually non existing firm.

I do not discredit your point on Big 4s not being the saints. Just like in the aviation industry, despite multiple redundant checks, disasters happen. But still air travel is regarded as one of the safest mode of transport. I can not explain this any better. I can give the list of aviation disasters in history, would you stop flying or would you pick an old rusty Cessna with questionable maintenance over a commercial airliner?.


I will not reply to any of your further replies since I sense a strong intentional bias. I was in the wrong to think that this is a forum filled with sensible & reasonable adults.

Again, I had replied to V. Narayan sir's post about no company being saint. I subscribe to that ideology. I am not trying to defend Big4s either, Corporates do not have identities, it's the team. You cannot blame the entire Investment Banking industry just because one VP peed on a flight.


Very big disclaimer : I'm not singing "praises" about my profession. I'm just stating few good things that I know since I am in the industry, I neither consider this as to be the best profession. I do not have any opinion like that, towards any profession. Doctors and carpenters are same to me. I do not respect one more than the other. I have heard few horror stories about medical profession too, which is considered as one below god in India. I know better to not judge any profession. If anyone wants, I can give equally lengthy bad things about my profession.
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Old 28th January 2023, 13:41   #119
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

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Originally Posted by amit1agrawal View Post
By the way, what about those gullible investors who lost their share of investment due to Rs 48000 crores already being wiped out from Adani's shares while Hindenburg made some handsome money?
Wiped out 48000 crores of assets that never existed? If Hindenburg is right, these gullible investors will thank their stars and Hindenburg that they didn't loose more. If Hindenburg is wrong, they will recover when Adani recovers. If they are of the kind that flips stocks without knowledge of underlying value, they have to take responsibility for their decisions.
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Old 28th January 2023, 13:52   #120
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

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Originally Posted by Tucker48 View Post

Let's say Adani is manipulating the stock but whole India is benefitting from that but what if hindenburg is manipulating the report, whose set to gain USA, India or hidenburg?

I can't believe I am reading so many posts on the lines of "Stock manipulation is fine since the country benefited from Adani" Is it something special for Adani, or does it apply to all companies? So any company that manipulates stock can get away with it by building some roads and powerplants?

It does not matter whether Hindenburg has hidden motives or not. The question here is 'Were the retail investors and PSU funds cheated ?' Money does not get created on its own. It only goes from one entity to another entity. Did Adani trick the PSU funds into investing by showing bloated valuations using shell companies? Did Adani trick the retail investors into investing by showing bloated valuations using shell companies ? If the answer to any of these questions is yes, there should be repercussions. Else it destroys the trust in our stock market. That said, everyone knows nothing will happen to Adani.

Last edited by padmrajravi : 28th January 2023 at 13:53.
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