In a major development, the US government concluded an investigation wherein short-seller investment research firm Hindenburg alleged a huge corporate fraud against Indian billionaire Gautam Adani. The US official underscored the claims were not "interlinked" with the Adani Ports & Special Economic Zone Limited-- the subsidiary spearheading the Sri Lankan project.
Although, the probe called the report "irrelevant", International Development Finance Corp (DFC)-- a development finance institution and agency of the United States federal government that scrutinises the investments and development projects primarily in lower and middle-income countries-- enunciated it was "satisfied" with the accusations, which claimed "Adani was pulling off the largest con in corporate history".
Hindenburg's claims weren't applicable: US official
According to a report by Bloomberg, a senior US official told them the allegations weren’t applicable to his conglomerate’s ports subsidiary before extending his firm as much as $553 million for a container terminal in Sri Lanka.
Notably, a major uproar started earlier in January this year when the US-based firm claimed that Indian conglomerate Adani Group had engaged in a brazen stock manipulation and accounting fraud scheme worth Rs 17.8 trillion ($218 billion) over the course of decades.
This resulted in the Adani group losing a massive chunk of worth within a few hours of publication of the report. Besides, Adani, who had earlier placed in the third position in the tally of the world's richest people, slipped drastically to 26th place as his net worth witnessed a major decline of 35 per cent within a few days. However, he jumped three positions and is now the world's 23rd richest man (as of December 1, 2023).
Adani claimed the report "a deliberate attack on India"
At that time, Adani, in a video message and through multiple statements, denied the allegations featured in the Hindenburg report, including stock-price manipulation, and dubbed it as an "attack on India". However, the matter turned into cold storage after a few months, although, it remained hot cake in the political arena.
But, the Adani group again hit the headlines when his company got one of the biggest and most prominent US government-backed infrastructure projects in Asia.
Why Sri Lanka project is crucial for India and the US?
Several raised questions over the Biden administration's support but the DFC underscored that the allegations weren't applicable to Adani Ports & Special Economic Zone Ltd.
It is worth mentioning the project is not as straightforward as it sounds. It has geopolitical complications amid the fact the port has strategic significance and the investment is also seen as crucial for the Biden administration to maintain its hegemony against China. Besides, the US has been pushing exceptionally hard to counter expanding Chinese influence in the region after Chinese President Xi Jinping launched his ambitious project-- the Belt and Road Initiative-- to build infrastructure around the globe, which the West dubbed as a "debt-trap".