Last month on 24th Jan 2023 Hindenburg Research, a NewYork based investor research firm, alleged that the Adani Group had engaged in a brazen stock manipulation and accounting fraud scheme.
Though the Indian Conglomerate sent a 413 page response to Hindenburg research claiming that, they had complied with all local laws and made the necessary regulatory disclosures. The research firm denied to accept and remained strong on their allegations.
This shook the roots of Adani Groups. On 1st Feb 2023 Credit Suisse assigned zero lending value to Adani bonds, as a result of this Adani Enterprises shares crashed and their market cap eroded. Due to Credit Suisse intervention, the board of Adani Enterprises decided not to proceed with the fully subscribed Follow-On-Public Offer and withdrew Rs. 20,000 crore FPO.
Amid this chaos, on 2nd Feb 2023 Citi Group’s wealth unit halted margin loans against Adani’s securities. They stopped accepting securities of the conglomerate as collateral for margin loans due to the drastic price drop of Adani issued securities. The bank decided to remove lending value to all Adani issued securities.
Adani Group in its 413 page response to Hindenburg Research report cited Credit Suisse and Citibank as key lending partners.
The group had also cited its relationship with multiple lending institutions and bankers across the globe including JP Morgan Chase, Bank of America, UBS Group, Deutsche Bank and Barclays.
Adani Enterprises stocks and bonds have plunged to distress levels. Gautam Adani’s net worth has dropped down sharply.
