Adani group, an Evil corp?
- Thread starter Pyception
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Marcus Fenix
Innovator
Article Link from the image posted above by @booo -
www.forbes.com
Still reading through it but I doubt retail investors will touch this once market opens on Monday.
As for LIC & SBI our parents will bear the brunt.
Adani Enterprises’ Failed Share Offering Exposes More Investment Funds With Ties To The Adani Group
Three investment funds that purchased shares in Adani Enterprises’ scuttled $2.5 billion offering have ties to the Adani Group and suspected Adani proxies, according to a Forbes analysis.
www.forbes.com
Still reading through it but I doubt retail investors will touch this once market opens on Monday.
As for LIC & SBI our parents will bear the brunt.
It is just a difference of opinion. He is not a troll. Many a times he is right and others don't come out of their positions. Happens to all of us.
The difference between the level of discourse in this thread and a similar threat on Team-BHP is very stark.
Both sides have some valid points, there is blatant corruption and stock manipulation, there is also a geopolitical angle.
At the end of the day, "dharma" of an investor in the stock market is to make money. I won't short Adani because my pockets are not deep enough to compete with the Govt, I won't go long because his books and numbers are a work of fiction. The lesson to take away from this whole fiasco is that there is still a place for actively managed mutual funds, while the passive indices took a beating many actively managed funds walked away unscathed.
Both sides have some valid points, there is blatant corruption and stock manipulation, there is also a geopolitical angle.
At the end of the day, "dharma" of an investor in the stock market is to make money. I won't short Adani because my pockets are not deep enough to compete with the Govt, I won't go long because his books and numbers are a work of fiction. The lesson to take away from this whole fiasco is that there is still a place for actively managed mutual funds, while the passive indices took a beating many actively managed funds walked away unscathed.
For those who are claiming AtTaCk oN tHE Natioin i just want to say that offshore shell entities investing is called insider trading and we should have learned lessons from Harshad Mehta’s fiasco already and they should start criminal investigation.
AFAIK, routing money from Mauritius to India is legal, it was exactly because of geopolitical reasons it was made legal and tax free.
Fudging books and manipulating stock price is illegal and hence the investigation by SEBI.
Let's keep things civil. I did not claim an attack on the nation, but it is not unreasonable to hypothesize that sniping a firm which operates key strategic assets could also have reasons beyond the obvious. Especially when it is by a firm under the scanner of justice for potentially illegal activities.. Shorting a bond has limited upside, especially if the firm does not default on its payments, I am still trying to figure out how they made bank, which would require shorting Adani equities, without participating in Indian markets, as they have claimed. Following money trail will answer a lot of questions, on both sides.
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No no, i am not pointing you specifically. The point i was trying to make is that the entities in Mauritius are very shady here. If they have any percentage of ownership from Adani’s members(his brother, just like nancy pelosi being the greatest trader of our times) then it would be insider trading. Makes aam aadmi trader severely disadvantaged and hence is outright illegal. Its not about money transfers between india and mauritius being legal or not.
Oh, btw; seems the guy from sebi who is supposed to investigate is also his brother in law or something like that.
Ah, my bad. I agree completely. These guys operate with a whole another set of rules which severely disadvantage the common man, and even after that they commit fraud!
Marcus Fenix
Innovator
In the short term Adani stock price will come down to somewhat normal levels.
However since the offshore entities,SBI& LIC won't sell off due to wink wink reasons it won't hit zero.
In the long term I hope the govt. does 2 things-
1) Ensure that we don't put all critical eggs into a single basket of a single man.
2) Take action to ensure confidence in the market regulatory process or else most foreign investment will stay away unless they are chums like UAE govt. funds.
I am not sure about whether point 2 will happen though.
And if by chance point 2 happens(chances are low as SEBI has been investigating them since 1.5 years and have produced nothing) and Adani tumbles drastically then I guess govt. will ensure that the critical assets are sold off to another Indian entity and not someone else altogether.
Antinational are everywhere. But I didn't know that people who have invested in Adani were also anti nationals.
He is just taking advantage of tax loopholes by having companies in Mauritius. Just for the record, I'm not taking anyone's side here. I don't care about him or the govt role in this because these rich guys play by different rules. I'm like NPC here.
en.m.wikipedia.org
Mauritius route - Wikipedia
Marcus Fenix
Innovator
Yeah creating entities in low tax regimes is a standard tax loophole many companies use e.g. Ireland is where most companies create their EU P&L booking entities to reduce tax on their EU income.He is just taking advantage of tax loopholes by having companies in Mauritius. Just for the record, I'm not taking anyone's side here. I don't care about him or the govt role in this because these rich guys play by different rules. I'm like NPC here.
Mauritius route - Wikipedia
But the problem here is that Adani holds close to 75% of the shares as promoter shares.
As per SEBI rules max value is 75% that can be held by a company's promoters and their related entities to ensure price fixing doesn't happen.
Source-Hindenburg Report
Please note that this is not gospel but based on additional information from the Forbes article as well as the data posted by Hindenburg the ownership of these offshore entities seem to be too close to Adani for comfort.
Also add on the fact that quite a few of these offshore entities have no offices, no employees,very generic websites with stock images and almost all their holdings is in Adani stock. FIshy max pro.
Now LIC holds 4.23% and I couldn't find SBI's stock %.
Adani Enterprises Ltd. Latest Shareholding Pattern – Promoter, FII, DII, Mutual Fund. Who owns, bought or sold Adani Enterprises Ltd. Shares?
Adani Enterprises Ltd. shareholding pattern – Promoter holding and pledges, FII, DII, and Mutual Fund holding changes for the latest quarter. Find out who owns Adani Enterprises Ltd.
trendlyne.com
Public only holds 6.5% of the stocks.
Now when you control the supply you control the price i.e. price fixing by creating artificial scarcity in the market coupled with hype surrounding the price uptick.
This is how its creating a possible scenario for retail investors & foreign institutional investors to buy in to the company.
When Indians have a plan, for instance, Make in India, they would first of all, tell the whole world about their plan, congratulate themselves about their plan, boast about their plan, marvel at their plan, compare others with their plan, ridicule others about their plan and in the end, can't even recall what was the plan
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I don't think there's any problem taking such tax advantages. The allegations are different though.
1. See, by law it's illegal to hold more than 75% shares of a publicly listed company by the owner (called promoters). He already owns very close to 75% shares of his own company. On top of that, from remaining pool of 25% shares, a large quantity of shares are owned by shell companies situated in Mauritius. Hindenburg says these these shell companies are owned by his relatives. That makes him owner of more than 75% of shares which is illegal.
2. Large percentage of remaining shares are taken by institutional investors like LIC and SBI. Making only a few percentage of shares being traded in open market like BSE and NSE. You have been hearing that his shares are expensive. You know why they were expensive? because there weren't many available in the first place. It's called artificial scarcity. Second problem is that, these tiny amount of shares are deciding the value of rest of 90% + shares too, giving them false extreme valuation to his worth and his companies.
3. Then he takes these extremely inflated shares and pledge them for more loans. He uses these loans to bid for more projects. When he gets new projects, the valuation of his shares goes up in the open market. Then he pledges even more shares to take even more loan to bid for even bigger project. So on and so forth.
Marcus Fenix
Innovator
Well not fully,
His core businesses were good enough but he got too greedy chasing the Forbes Top 10 list and probably played with his valuations to prop up the stock.
You can't have 3000% rally in stock prices in last 2 years of COVID if you don't have something transformational like a 100Kg battery tech with 1000 KM range.
He plays in operational industries like ports,power etc. which are not revolutionary industries like say self-driving/AI.
But they are not go big or go bust type industries as well.
Assume your house costs 10 lakhs realistically. You get a loan of maybe 7 lakhs with your house as a collateral.
But if you can mark up the price of your house to 1 crore when its actually 10 lakhs you get a loan of 70 lakhs with the same collateral.
Now if the real valuation comes out and you manage to skedaddle the bank will only recover 10 lakhs from the loan they gave you.
So if the empire crumbles he will fly the coop with the loans the banks have given him with his stock price as collateral.
However this can only happen if SEBI enforces its laws the probablity of which I am not sure about.
If govt. decides to follow the rule of the law this will be better for Indian economy in the long run as others especially foreign investors will see our markets are pretty transparent as they have a somewhat good reputation of being and will keep on investing.
However if govt. plays the short term hand and covers for Adani then it would lead to a massive loss of confidence among retail investors as well as foreign investors.
And as you know we need foreign investment if we want to become a major player in the international financial scene.
Ah well, the govt has already chosen the side. Its IT cell is running overtime. You can see massive bot comments supporting him under youtube videos, news articles, quora, twitter or where ever you can possibly post spam. None of it is surprising to be honest. It's all going like a clockwork. He'll be given enough time to cover his tracks before announcing a special investigation.
There's a reason why it's usually the PSUs keep giving loans to fraudsters. Private banks haven't got direct line to delhi. He and govt, they scratch each others backs. Nothing surprising. It's always been like that.
There's a reason why it's usually the PSUs keep giving loans to fraudsters. Private banks haven't got direct line to delhi. He and govt, they scratch each others backs. Nothing surprising. It's always been like that.
Kaleen Bhaiya
Innovator
Ultimately, it's is the comman man who faces the consequences of bad loans and debt write-offs.
It is hilarious how corruption and wrong-doings are tolerated and justified in the name of pseudo-nationalism. Some peeps here cannot comprehend that people can have a differing view than theirs and start calling out names and crap.
(not related to the matter being discussed/debated here but thought to share this nonetheless on their 'credibility' 'ethics' & 'investigations' & what-have you. you'll feel 'touched' again.)
^ this. This has been going on since Congress time. All their corporate friends made crores and gave bill to psu banks and lic. That time BJP used to whine about corruption and what not at the top of their voice and now they are doing the same thing but on a larger scale and the opposition is sitting quietly. In the end, the people are like an atm machine without withdrawal limits.
Marcus Fenix
Innovator
Only this time people are bringing up all kinds of conspiracies 10 moves away from the actual problem and not calling out the nexus leading to this corruption.
In earlier times everybody would be calling out the govt. for scams.