The United States government has refuted allegations of corporate fraud against Indian billionaire Gautam Adani, dismissing claims made by short-seller Hindenburg Research. This dismissal coincides with the International Development Finance Corp (DFC) extending approximately $553 million for a container terminal project in Sri Lanka, subjecting the Adani Group to a comprehensive due diligence investigation.
Earlier this year, Hindenburg Research’s report had a profound impact, wiping out around $100 billion from the Adani Group’s market value. The report, labelling Adani’s actions as “the largest con in corporate history,” cast a shadow of doubt on the conglomerate. However, a senior US official from the DFC, speaking anonymously, has stated that the accusations are not relevant to Adani Ports & Special Economic Zone Ltd., the subsidiary leading the Sri Lankan initiative. The official confirmed the agency’s satisfaction with its due diligence and found no merit in Hindenburg’s allegations regarding Adani’s supposed corporate malpractices.
Despite the dismissal of fraud allegations, the US agency intends to maintain oversight of the Indian conglomerate, emphasizing the need to avoid inadvertent support for financial misconduct. The unnamed DFC official stressed the importance of approaching infrastructure projects differently than China, highlighting the critical need for vigilance in such matters.
This development has injected fresh momentum into the shares of all 10 listed Adani Group companies, extending their impressive run on Dalal Street. The total market capitalization of the Adani Group has now crossed Rs 12 lakh crore.
The Sri Lanka port deal, backed by the US government, emerges as one of the most significant infrastructure projects in Asia. This move aligns with ongoing US efforts to counteract China’s increasing influence in the region, particularly in response to President Xi Jinping’s Belt and Road Initiative.
Despite various controversies surrounding the Adani Group, including its Australian coal mine and perceived ties with Indian Prime Minister Narendra Modi, the conglomerate has welcomed the DFC’s investment as a vote of confidence. Karan Adani, CEO of Adani Ports, described it as a reaffirmation by the international community of the conglomerate’s vision, capabilities, and governance during the announcement of the deal in Colombo.