Billionaire Blows: Ackman Kicks Seventh Richest Man While He's Down, Calling Adani 'Fraud' Report 'Credible'

Pershing Square Capital Management CEO Bill Ackman says he found a scathing and exhaustive report by Hindenburg Research on India's Adani Group "highly credible and extremely well researched."

What Happened? After a two-year investigation, Hindenburg presented “evidence” that the Adani Group has “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades."

The report cites former senior executives who say the conglomerate took on substantial debt and has a current ratio below one, indicating near-term liquidity pressure.

The investigation revealed a vast network of offshore shell entities controlled by Gautam Adani's elder brother, Vinod Adani, which were allegedly used to facilitate stock manipulation and money laundering.

See Also: Gautam Adani Explores Legal Action Against Short Seller Hindenburg In India, US

Gautam Adani, the company’s founder and chairman, lost an estimated $22 billion in net worth since Hindenburg issued its report.

Shares of the Adani Group-affiliated companies have traded down as much as 26% since the report was released.

The report also revealed the conglomerate had previously been the focus of four major government fraud investigations, which have alleged money laundering, theft of taxpayer funds and corruption, totaling an estimated $17 billion.

Why It Matters: Ackman, notorious for his 350-page presentation on Herbalife (the stock he called a pyramid scheme and shorted to zero), praised Hindenburg’s report.

Adani’s aggressive response to Hindenburg spoke “volumes” about the company, he said.

Adani Group denied Hindenburg’s allegations, calling them “a malicious combination of selective misinformation and stale, baseless and discredited allegations” intended to “undermine the Adani Group’s reputation” and damage demand for its shares.

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