The US administration extended a $553 million loan to the Adani group after it found that Hindenburg’s allegations against the Adani group were irrelevant, Bloomberg reported on 5th December citing an unnamed US official.
“The US government concluded that short-seller Hindenburg Research’s allegations of ‘corporate fraud’ against Indian billionaire Gautam Adani weren’t relevant before extending his conglomerate as much as $553 million for a container terminal in Sri Lanka,” a senior US official was quoted saying by Bloomberg.
Speaking with Bloomberg, an official from the US agency said that allegations in a scathing report by US-based Hindenburg Research were front and center as the International Development Finance Corp., or DFC, conducted a due diligence investigation of the conglomerate.
According to the DFC official who declined to be named, the DFC was satisfied that the accusations in the short seller Hindenburg’s report weren’t applicable to Adani Ports & Special Economic Zone Ltd., the subsidiary that is spearheading the Sri Lankan project.
The official confirmed that the agency was satisfied with its due diligence as it found no relevance in Hindenburg’s allegations of Adani pulling off supposed corporate malpractices.
Notably, the Adani Group’s market value eroded by around $100 billion after short-seller’s hitjob against the Indian conglomerate.
Meanwhile, the official claimed that the US agency will continue to monitor the Indian firm to ensure that the US government doesn’t unintentionally support financial misconduct or other inappropriate behavior. The official noted that the US approaches infrastructure projects differently than China.
The Sri Lankan port project with Adani is one of the biggest and most prominent US government-backed infrastructure projects in Asia. Over the years, the US has been making efforts to counter growing Chinese influence in the region and Chinese President Xi Jinping’s Belt and Road Initiative.
The Adani Group denied Hindenburg’s allegations and described its report as a ‘malicious combination of selective misinformation and stale, baseless and discredited allegations’.
The Adani Group has hailed the DFC’s investment as a vote of confidence following the Hindenburg allegations. CEO of Adani Ports and Gautam Adani’s son, Karan Adani told reporters in Colombo when the deal was announced, “We see this as a reaffirmation by the international community of our vision, our capabilities, and our governance.”
Meanwhile, the Supreme Court on 24th November reserved its judgment on a PIL seeking a Court-monitored investigation into Hindenburg’s allegations against the Adani group. However, the apex court had remarked that it is easy to make allegations against anyone, adding that petitioners should show some responsibility while levelling charges against any party. The court observed that one doesn’t have to accept the Hindenburg report as correct as it is easy to make allegations and that it had no reason to doubt SEBI.
