ANALYSIS: The Indian conglomerate is accused of breaching shareholder disclosure laws, which might expose its companies to delisting.
Hindenburg Research – so named after the famously flammable, doomed airship – has accused the Adani group of being the largest con in history. But one of the short-seller’s central allegations is mundane: Adani breaches a law that requires insiders to disclose their shareholdings.
A $10 million share purchase in a company worth $10 billion represents 0.1 per cent of the stock. But if only 10 per cent of the stock ever changes hands – because one shareholder owns 90 per cent and doesn’t want to trade – then a $10 million share sale represents 1 per cent of the tradeable stock. They control seven listed companies traded on the National Stock Exchange of India. Five are officially close to, or above, the 75 per cent insider shareholding threshold: Adani Transmission ; Adani Enterprises ; Adani Power ; Adani Total Gas and Adani Wilmar . Adani Wilmar has promised to get below 75 per cent by 2025.and his older brother, Vinod, have split their roles into legitimate and illegitimate functions, according to the Hindenburg theory. Gautam is the family’s public face.
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