Adani Enterprises cancelled its planned follow-on public offer (FPO) of Rs 20,000 crore, which had been fully subscribed on January 31, 2023. The cancellation came after two underwriters of the FPO, Elara Capital (India) Private Limited and Monarch Networth Capital, were accused by Hindenburg Research of participating in an alleged accounting fraud and stock market manipulation scheme by the Adani Group. Elara, a subsidiary of a London-based investment firm, and Monarch, an Indian brokerage firm, were named as book runners or underwriters in Adani Enterprises’ red herring prospectus. The Hindenburg Research report alleges that Elara operates several Mauritius-based funds, including the India Opportunities Fund, which is nearly 98.78% invested in Adani stocks. The report also claims that former employees of Elara have said that Adani and its promoters have money in the funds. Meanwhile, Monarch was described as a small Indian brokerage firm that was previously suspended and sanctioned by SEBI over market manipulation allegations. Bill Ackman, an American billionaire investor, stated that it wouldn’t be surprising if the FPO was “rigged with affiliated buyers.”

Hindenburg Research has posed the following questions to the Adani Group regarding Elara Capital:

1. What is the original source of funds for the Mauritius-based entities (APMS Investment Fund, Cresta Fund, LTS Investment Fund, Elara India Opportunities Fund, and Opal Investments) that hold almost $8 billion worth of shares in Adani-listed companies?
2. Can you explain the relationship between Monterosa Investment Holdings, its CEO, and the Adani family, considering Monterosa entities own at least $.5 billion in Adani Stock?
3. What is the reason for the large, concentrated investment into Adani listed companies by Gudami International, a once-related party entity of Adani?
4. What was the original source of funds for Monterosa and its investments in Adani?
5. What was the original source of funds for New Leaina and its $420 million worth of holdings in Adani listed companies?
6. Can you explain why Opal Investment Private Ltd., a large holder of Adani Power shares, was formed on the same day and in the same jurisdiction as an entity associated with Vinod Adani?
7. How does Adani respond to the statement from a former trader for Elara that it is obvious Adani controls the shares, and that the structure of the funds is designed to conceal their beneficial ownership?
8. Can you explain the relationship between the CEO of Elara and notorious stock manipulator Dharmesh Doshi, considering Elara is one of the largest “public” holders of Adani shares?
9. What was the original source of funds for the Elara funds and their investments in Adani?
10. How does Adani explain the high delivery volume (up to 30%-47%) in Adani stocks from the offshore entities holding concentrated positions, which is a massive irregularity according to Hindenburg Research’s analysis?
11. How does Adani respond to the suggestion that the offshore entities may be involved in manipulative wash trading or other forms of manipulative trading?

Here’s the Adani Group’s response to the questionnaire:

“The individuals and entities mentioned in the questions are public shareholders in the listed companies within the Adani Portfolio. Suggestions that they have any connection to the promoters are inaccurate. A publicly traded company does not have control over the purchase or sale of shares, the volume of trades, or the source of funds for public shareholders. As per Indian law, a listed company is not required to have such information on public shareholders. Therefore, we cannot comment on the trading patterns or actions of public shareholders.”

(With inputs from India.com)