How the ‘Madoffs of Manhattan’ can unravel Gautam Adani’s empire

THE bitter battle between the Adani Group and Hindenburg Research is heating up. In a rebuttal to Hindenburg’s claim that Indian tycoon Gautam Adani has overseen the “largest con in corporate history”, the company took on a dramatic tone, calling the New York-based research outfit the “Madoffs of Manhattan”. The activist short-seller’s report, Adani said, was a “calculated attack on India” and its “growth story and ambition”.

Never mind that Hindenburg’s founder Nathan Anderson had worked with Harry Markopolos, the analyst who uncovered Bernie Madoff’s Ponzi scheme that robbed investors of as much as US$65 billion. If anything, that puts Anderson in an anti-Madoff camp. Even as Hindenburg responded swiftly to Adani’s rebuttal, saying it failed to answer “62 of our 88 questions”, it is nonetheless worth pondering what the short seller might focus on next to win over investors’ minds and money.

Despite its good reputation in New York’s finance circles, the Hindenburg name by no means translates into automatic success in Asia. Other conglomerates, such as China’s HNA Group and China Evergrande Group, had survived years of high-profile short sellers’ attacks and failed only when the political wind turned against them.