US examined Hindenburg allegations before giving $553 million loan to Adani Group for SL port project: Report
The US government reportedly found Hindenburg Research's corporate fraud allegations against Indian billionaire Gautam Adani irrelevant before approving a financial extension of up to $553 million for his conglomerate's container terminal project in Sri Lanka.
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FollowThe US government, after a thorough review, dismissed the corporate fraud allegations made by short-seller Hindenburg Research against billionaire Gautam Adani. Subsequently, the government extended a financial assistance of up to $553 million for a container terminal project in Sri Lanka led by Adani's conglomerate. The scathing report by Hindenburg Research, which had significantly impacted the Adani Group's market value, played a central role in the due diligence conducted by the International Development Finance Corp. (DFC), as revealed by a senior official from the US agency to Bloomberg.
The DFC official, who opted for anonymity while discussing the negotiations, conveyed that the DFC conducted a thorough assessment and concluded that the accusations from the short-seller's report, claiming Gautam Adani was orchestrating "the largest con in corporate history," did not apply to Adani Ports & Special Economic Zone Ltd. This subsidiary is at the forefront of the Sri Lankan project, and the DFC was content with its findings.
The official emphasized that the US agency will maintain ongoing scrutiny of the firm to prevent unintentional support for financial misconduct or any inappropriate behavior. They highlighted the importance of adopting a distinct approach to infrastructure projects compared to China, underscoring the need for vigilance in ensuring ethical practices.
The involvement of Adani in the Sri Lankan port deal represents one of the most significant and notable infrastructure projects in Asia backed by the US government. This development follows years of concerted American initiatives aimed at countering the expanding influence of China in the region, particularly in response to President Xi Jinping's Belt and Road Initiative, which seeks to establish infrastructure projects worldwide.
The Adani Group refuted the allegations made in the Hindenburg report, which included accusations of stock-price manipulation. Formal regulatory investigations and court proceedings in India have not revealed any evidence of wrongdoing. Recently, Adani stocks have experienced a positive trend, with Adani Ports and Special Economic Zone Ltd. registering a 7.4 percent gain in the current year.
The Adani Group has presented the investment from the DFC as a significant vote of confidence, particularly in the wake of the Hindenburg allegations.
"We see this as a reaffirmation by the international community of our vision, our capabilities and our governance," Karan Adani, the tycoon's son and chief executive officer at Adani Ports, told reporters in Colombo when the deal was announced.
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