Produced and directed by Tom Griggs. Filmed by Petros Gioumpasis in London, Gregory Bobillot in New York, Abhilash Kalathi in Bangalore. Edited by Alex Langworthy. Extra footage by Getty, Reuters, Bloomberg and ANIThe story of Adani is the story of the world's third-richest man being cut down to size by a short-seller group on the other side of the world.The Adani scandal is a wake-up call to the Indian government that we need a complete overhaul of our regulatory system.
He has paid back his debt on his personal shareholding which he had borrowed, about $2.5bn. Nobody in this country has a concern about the ability to repay debt. There does seem to be a very, very nice parallel between the rise of Narendra Modi and the rise of Gautam Adani. And the rumours that he's close to them are not new rumours. They've been around for 20 years.
I think Mr Adani would like the perception to remain that he is very close to Mr Modi. Now, how close he is to Mr Modi is only a question that Mr Modi could answer. Yes, it does help to be a big entrepreneur, because in relation to land allotment and local licencing, government steps on the plate. But they do it for everybody.
Adani has been building infrastructure projects in neighbouring countries, including Bangladesh and Sri Lanka. Adani Power is India's largest private thermal power producer, and Adani Enterprises is the flagship company which houses Adani's mining and coal trading operations. You know, the Adani business model is the same business model that is followed by many promoters in India. It's a business model which says we get into those industries where there is a regulatory framework, where the government matters, where the politician who is in charge of the government matters.
Before the Hindenburg rport, there were clearly overvalued compared to equivalent companies in their sectors. Clearly. Journalists and investors were starting to ask some questions about the valuations. There were also questions about Adani's extensive use of offshore vehicles, and of the presence in its shareholder base of a lot of investors that were funds that appeared to be only holding Adani stock. But nobody could quite put it all together. And, in part, this was because Adani has a track record of going after critics, of taking legal action against journalists.
There are two main allegations made by Hindenburg, one of which is stock market manipulation. And the other one is accounting fraud. There were all these offshore entities, a lot of which were registered in jurisdictions like Mauritius or Singapore, which only seemed to invest in Adani shares.