Shares of Adani Ports (NSE: ADANIPORTS) are up nearly 7% today. Shares of ADANIPORTS rose on news that the promoter – the Adani family and its interests – has increased its stake in the company. The amusement, of course, arises from the way Hindenburg claims that the Adani family has long owned a number of secret cross-holdings. So, if we were evil, we might suspect that the stock price is now rising because Adani is openly doing what he was secretly accused of doing. That would also be a bit unfair – openly increasing the shareholding position is completely different from a secret collection of such holdings – not least in the way they are financed.
It’s worth going back to the original claim: “Today we reveal the results of our two-year investigation and present evidence that the INR 17.8 trillion ($218 billion) Indian conglomerate Adani Group is engaged in a brazen Stock manipulation scheme and accounting fraud.” over the decades.” The concrete detail for us today: “Many of the companies associated with Vinod Adani have no obvious signs of operation, including no reported employees, no independent addresses or phone numbers, and no meaningful online -Presence.” Nevertheless, they have collectively transferred billions of dollars into listed and private companies in India’s Adani Group, often without any obligation to disclose the nature of the related party transactions.” To limit it to the necessary details: The The basic allegation is that companies in the Adani Group take out loans and then spend this money on shares in other companies within the group. Borrowings and investments are not disclosed. This then leads to an attack on the Adani Group companies.
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Adani Ports share price from Google Finance
As we have already noted with respect to Adani Ports, these claims are strongly refuted.
Which brings us to today: “Adani Group shares recorded decent gains in early deals on Monday as investor sentiment towards the group’s shares improved after the group promoter increased its stake in two listed companies of the group .”
That’s amusing, isn’t it? “The rise in share price of the two Adani Group companies came after the promoter company increased its stakes in them as part of its ongoing strategy to recover from the negative publicity.”
Well, we believe it is. The accusation is that the share price is too high due to undisclosed promoter shares. The share price rises due to the announcement of the shares of the promoter. But it’s obviously just for fun. Because this is the approach we would expect from an Adani group that is completely in the clear. The stock price has fallen due to false claims. Why shouldn’t the promoters get richer by buying something artificially cheap? On the other hand, it is also the reason why the stock’s rise eventually slows down – people run out of money to keep buying the stock.
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