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Old 28th January 2023, 14:09   #121
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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 padmrajravi View Post
Money does not get created on its own. It only goes from one entity to another entity.
I didn't say Adani is manipulating, I was saying both sides can manipulate and who stands to benefit. But if one digs deeper then he will find manipulation is rampant in financial markets.

Money is made up.

A company issues shares, takes on debt, issue bonds. Enormous amounts of money is created in these processes.
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Old 28th January 2023, 14:15   #122
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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 Arun_S View Post
Having learnt lessons from Satyam and Unitech, I try to look for decent ethical practices in a company, some how i was not comfortable with this rocket raise of share prices so stayed away.
Satyams' case was different. Satyam as an independent entity had real business, professional management team except for few cronies on the financial side who helped the founders siphon profits from Satyam to their real estate and infrastructure ventures. They had fairly satisfied major customer accounts all around the world. When it's fiasco came out and it's stock crashed it was good opportunity for long term investors. I was in my early years of small time investing just 3-4 years after college into a job. I made enough to pay for down payment of my first condo in the US out of Satyams fiasco. The regulators at that time did a wonderful job of handling a smooth transition of Satyam to Tech Mahindra.

I have zero confidence in doing the same with Adani, a company whose leadership consists of mama, mami, kaka, banja and bhatija. In this case, I am trying to minimize my losses if any, by digging into exposure of one of the major private banks of India to Adani in which I have considerable holdings from a retail share holder perspective.

Last edited by Theyota : 28th January 2023 at 14:17.
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Old 28th January 2023, 14:16   #123
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

Not for nothing is it said:

“Behind every sudden great fortune, there is a great crime”

Just saying

Cheers
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Old 28th January 2023, 15:40   #124
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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 padmrajravi View Post
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?
This is the sad reality of our times. We have given up on analyzing on the merits of the situation - the report in this instance. We instinctively fall into respective slots created for us, ready to blame shadows and conspiracies, which also come conveniently pre-packaged for us.

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Originally Posted by padmrajravi View Post
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?
Agreed again. Regardless of motives behind the report, nobody has questioned its veracity. It shows that the Adani enterprise retains its roots in fudging, siphoning, laundering, over-invoicing - whatever it takes attitude to family wealth and influence. It has very little of those niceties - corporate governance, external board members, auditors - as a consequence.

Given all this, do we really think Adani tricked its lenders, banks, LIC? More likely that these wells were brought to the horse to drain. Eventually, the taxpayer (you and me) will pick the tab to distribute wealth between the super-rich and the saints.
You will though still hear that corruption is a distant memory now since demonetization cleaned the swamp.

Oh the irony of it all. We are being scammed in broad daylight. Yet we instinctively applaud the great master at his best.
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Old 28th January 2023, 15:44   #125
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

After going through the thread,
I checked the Hindenburg website to understand what's in the report.

hindenburgresearch.com/Adani
I found the following points to be quite compelling

Quote:
Our research involved speaking with dozens of individuals, including former senior executives of the Adani Group, reviewing thousands of documents, and conducting diligence site visits in almost half a dozen countries.
Quote:
Key listed Adani companies have also taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing. 5 of 7 key listed companies have reported ‘current ratios’ below 1, indicating near-term liquidity pressure.
Does this mean that the collateral is quite overvalued for the bank loans?
So if Adani org starts to fail who all are going down with it?


Quote:
  • Our research, which included downloading and cataloguing the entire Mauritius corporate registry, has uncovered that Vinod Adani, through several close associates, manages a vast labyrinth of offshore shell entities.
  • 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.
  • 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 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.
  • Leaked emails show that the CEO of Elara worked on deals with Dharmesh Doshi, a fugitive accountant who worked closely on stock manipulation deals with Ketan Parekh, an infamous Indian market manipulator. The emails indicate that the CEO of Elara worked with Doshi on stock deals after he evaded arrest and was widely known as a fugitive.
Stock Manipulation ?

Their aspersions on growth -
US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history-adanitable1.png

There are a lot of such bullet points clearly indicating why they are convinced they are right.


I doubt the report is incorrect (May be a bit dramatic for impact), and they have clearly indicated that this is their operating model, identify such entities, collect research and then short them.

I think it will lead to a correction for the Adani group valuation and then the growth will continue. How much correction, will determine what mayhem this situation plays domestically on us, banks and LIC.

Hindenburg must have already covered their efforts worth in the short so far.

- Slick

PS - Mods, do delete if this data is not to be posted here. Thanks
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Old 28th January 2023, 16:36   #126
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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 Slick View Post
Key listed Adani companies have also taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing

Does this mean that the collateral is quite overvalued for the bank loans?
This does NOT seem to be factual information. Substantial debt putting the entire group on precarious financial footing is correct, but pledging shares of their inflated stock for loans is wrong.

See, how much shares Adani promoters have pledged is public information. I took at quick look and on an average, only 5% of promoter's holdings in each listed Adani stocks are pledged for taking loans. So even if Adani stocks fall big time from here, there will be no "margin call" and it will not affect the banks.

Assets/networth can always be inflated to take bank loans. It works very well if you have influence/connections at the right places. That's pretty much how Reliance Power (Anil Ambani co) racked up so much debt and eventually crashed and burned.

Last edited by SmartCat : 28th January 2023 at 16:48.
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Old 28th January 2023, 17:03   #127
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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 SmartCat View Post
See, how much shares Adani promoters have pledged is public information. I took at quick look and on an average, only 5% of promoter's holdings in each listed Adani stocks are pledged for taking loans.
Are you sure on this? I think the loans taken are in the range of 1.5 lakh crores, so I'd assume collateral would be atleast double that - which should be excess of 10%?

EDIT1: Its quite a range from 2.5% to 25%

EDIT2: Sorry for the crop image, the last column is in % - which is the % promoter share pledged. Source is NSE.
Attached Thumbnails
US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history-adani.jpg  


Last edited by rrsteer : 28th January 2023 at 17:22.
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Old 28th January 2023, 17:27   #128
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

If so much wrong doing and irregularities were there, how will SEBI keep quiet? They may be muzzled, but only so much. Not totally.

Last edited by Eddy : 28th January 2023 at 20:26. Reason: as requested
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Old 28th January 2023, 18:00   #129
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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 Gansan View Post
If so much wrong doing and irregularities were there, how will SEBI keep qiet? They may be muzzled, but only so much. Not totally.
Quote:
Originally Posted by V.Narayan View Post
Dear @whitewing, a very good question that would be on several minds. This is so because SEBI has to investigate and prove matters beyond all reasonable doubt that can withstand impartial judicial scrutiny. SEBI for all its faults, is a national institution that has to be held accountable to a higher standard than social media kangaroo courts...
Sir, I do bear in mind such a key regulatory body will be held to a higher level of diligence and quality. On a forum like this, we just express opinions - that too based on reports in the media and the web. The basis for me cribbing on the delay by SEBI in unraveling the holdings are the media reports I had read earlier.
Dug a couple of them to provide context.

https://www.indiatoday.in/business/s...233-2023-01-27
Quote:
In July 2022, the market regulator initiated a probe of little-known offshore funds based out of Mauritius, which had large holdings in Adani Group’s listed companies, which potentially raised concerns about stock price manipulation.
However, at the time, Sebi’s investigation hit a wall due to lack of information from jurisdictions where these funds were domiciled.
https://www.moneylife.in/article/seb...ovt/64576.html
Quote:
The Securities and Exchange Board of India (SEBI), the country's capital markets regulator, is studying the Hindenburg report and may use it to aid its own ongoing probe into offshore fund holdings of Adani Group, two sources told Reuters. Spokespersons for the regulator had no immediate comment.
That said, I had a very positive experience with SEBI recently.
I had an issue with a private placement bond - this was for a largish amount [for me as an individual , not to be compared to the numbers discussed in this thread ]. BSE was unhelpful and my broker was clueless on the next steps. I was on the verge of initiating legal proceedings when I contacted SEBI and boy, did things move! They took up my complaint and within a fortnight the issue was addressed. This for a small investor, and not having to "know" someone in the offices.

Last edited by whitewing : 28th January 2023 at 18:02.
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Old 28th January 2023, 18:06   #130
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

People on here claiming that Hindenburg is evil because they're short sellers who publish relevant information must hate thermometer companies for making money because people need to measure temperatures when they're ill.

Always good to see the straw man army out in force.
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Old 28th January 2023, 18:07   #131
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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 rrsteer View Post

EDIT1: Its quite a range from 2.5% to 25%

.
It is 0 to 25% ( couple of Adani cos missing in that list). That's why I mentioned avg of 5%, keeping size of all companies in mind.

This number is considered negligible, and hence there is little or no risk to banks or Adani himself on pledged holdings collateral.

It's a problem only if promoter pledged shares goes to 35 or 40%

Last edited by SmartCat : 28th January 2023 at 18:15.
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Old 28th January 2023, 18:15   #132
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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 SmartCat View Post
...This number is considered negligible, and hence there is little or no risk to banks or promoter on pledged holdings collateral.

It's a problem only if promoter pledged shares goes over 40%
In case of a steep fall, wouldn't the banks call for more shares to be pledged to ensure that their principal is covered? (Of course given the lo % of pledge, I suppose the promoters can easily manage that)
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Old 28th January 2023, 18:15   #133
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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 SmartCat View Post

This number is considered negligible, and hence there is little or no risk to banks or promoter on pledged holdings collateral.
First let me state this statement is comforting to read, coming from a seasoned professional like you.
I, on the other hand was playing scenario building in my head. And a plausible scenario I formed (and got attracted to) was Adani loosing control of companies to foreign lenders, should share price continue to tumble. Of course it was an extreme case. In summary, without getting attached to the right-wrong debate, I 'feared' () for Adani the biggest problem is the pledged share part. So good to read above.

Quote:
Originally Posted by SmartCat View Post
It is 0 to 25% ( couple of Adani cos missing in that list)
A question here - the missing companies are the recently acquired cement companies? So while the pledge ratio would be shown as 0% - but they would have provided some collateral there too?

Last edited by rrsteer : 28th January 2023 at 18:25.
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Old 28th January 2023, 19:15   #134
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Re: US-based firm Hindenburg alleges Adanis are pulling the world's largest con in corporate history

Looking from technical point of view (disregarding all about the scam, report blah.. blah..) , Adani enterprises stock can be seen to be in strong correction. Sentiment is not going to suddenly turn positive and stock is not going above 3100 , atleast for next few weeks. That means, FPO is busted for good.

There may be consolidation at this point due to the sudden crash, after which price can potentially correct till 2200 and if it doesn't stop there, can test 1600 levels in long term.

Most retail investors tend to buy when a stock falls, mostly due to fear of missing opportunity. That may work for a cyclical stock / industry but not in these cases of meteoric rise and deep corrections.

Last edited by deetee : 28th January 2023 at 19:20.
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Old 28th January 2023, 19:38   #135
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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 Cyborg View Post
Not for nothing is it said:

“Behind every sudden great fortune, there is a great crime”

Just saying

Cheers

Indeed. Dig into Tata’s history (and other old companies) and you will find them to be key partners of the East India Company in smuggling Opium into China.
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