The now-former fourth richest man in the world has been accused of the “largest con in corporate history” by a US activist investor as his net worth plummets by more than $60 billion. But whether climate warriors should cheer or take a pause is a little more complicated.
Gautam Adani’s seven listed businesses — which include several committed to neutralising the group’s carbon emissions — plunged as much as 25% in value last week as the Indian tycoon’s calls for calm were drowned out amid a sharemarket meltdown.
Shares of Adani Enterprises, Adani’s flagship firm, have plummeted almost 55%, while India’s stock exchanges halted trading on five of the firms as shares crashed to the daily limits.
It’s an unravelling many might have doubted possible for Adani, and it all began when a US investment research firm, Hindenburg Research, released a damning report that accused the conglomerate of fraud, manipulating stock markets, and offshore tax havens.
The firm — which has bets against Adani’s companies — drew a big question mark over the “sky-high valuations”. It also said the “substantial debt” saddling the multinational meant its powerful facade hid little more than a financial house of cards.
Adani’s denial was swift and outright, saying it was considering legal action over the “maliciously mischievous, unresearched” report. But it wasn’t enough to stem the tide of a stock market bloodbath. The group’s value halved — amounting to $100 billion dollars — in the aftermath.
Adani, aged 60, himself broke his silence late last week after he caused shockwaves by suddenly abandoning a hefty $2.5 billion deal, just 24 hours after it was sealed, to sell new shares in Adani Enterprises.
“For me, the interest of my investors is paramount and everything is secondary,” Adani said.
“Once the market stabilises, we will review our capital market strategy.”
These events could upend more than just the multinational, which many thought was too big to fail. The tailspin has prompted India’s version of the Reserve Bank to ask lenders how exposed their debts are to the meteoric fall of the Adani Group, according to anonymous sources who spoke to Bloomberg.
Among the transactions were several related to Adani-owned Australian company Bravus, involving $147 million from the privately owned Carmichael Rail to buy assets from Adani Mining, a $100 million line of credit from Adani Global to Carmichael Rail to pay its debts, and a $100 million security deposit from an Adani private family trust in the Caribbean to use its North Queensland Export Terminal.
In a statement, Bravus said all were above board and dismissed the Hindenburg report as presenting “transactions related to Adani’s Australian businesses in a misleading way to purposefully undermine the reputation of the Adani Group, in order to pursue their own profit by short-selling shares in Adani Group companies”.
But the Australian Securities & Investments Commission (ASIC) confirmed it “will review the allegations against Adani and determine whether further inquiries are warranted”, a spokesperson for the regulator told Reuters.
The Hindenburg report also alleged Adani’s brother-in-law, Samir Vora, was the ringleader in a diamond trading scam before he was appointed the executive director of Bravus. Bravus responded to the allegations by noting that Hindenburg omitted the fact Vora was cleared of allegations by Indian courts.
A win for the climate?
At first glance, it seems like good news — or at least a form of deeply satisfying karmic retribution — for a name that has come to epitomise the worst of the worst among climate activists, First Nations peoples, and many more when it comes to fossil fuel abuses in Australia.
On the global stage, however, Adani has been working hard to scrub itself of the stench of a vast fortune built by mining, shipping and burning coal, pledging tens of billions of dollars to develop renewable energy.
The multinational has vowed to invest a total of US$70 billion by 2030 across its green energy value chain, which — if it makes good on its promise — would make Adani the world’s largest renewable energy producer.
Indeed some speculate Adani’s personal relationship with India’s Prime Minister Narendra Modi was a driving force behind the country’s unlikely pledge at COP26 to work towards net-zero carbon emissions by 2070.
The Adani Group is making its own cells for solar panels and has outlined plans to manufacture the rest of the parts in the coming years. Its foray into wind energy via its enormous transmission lines has been bolstered by Adani’s own turbines, and its plans to construct two battery factories also form a picture of a self-conscious company.
But it’s little more than smoke and mirrors, Climate Energy Finance director Tim Buckley tells Crikey, compared to the egregious and irreversible damage Adani has wreaked on the earth, while Gautam Adani himself is busy “leveraging crony capitalism for everything he can milk from it”.
“Adani is the largest private developer of new coal mines in the world, building new coal-fired power plants, LNG import terminals, methane gas reticulation systems, coal trading, and even US$10 billion coal-to-plastic projects in Gujarat. How is that in any way aligned to the climate science?” Buckley asked.
“India would be a lot more effective in delivering on decarbonisation of its economy and powering its future with more sustainable energy forms if it wasn’t for the pervasive corrupting influence of coal permeating through all government decisions there, like it is here in Australia.”
Let Adani’s downfall be a warning to Australian companies greenwashing their climate transgressions behind clever accounting magic, Buckley adds — you’re next.
“The SEC and ASIC are putting in place clear financial rules about the threat of greenwash as a clear form of investor deception and fraud,” he said.
At least on the local scale, Adani’s deceits were very obvious.
Talk of Galilee Basin coal projects creating 27,000 jobs five years ago (since mysteriously shrunk to 15,000, then 10,000, then ever less) on being facilitated (i.e. funded) by government was absurd; a detailed study of the aptly-named ‘China First’ (Australia’s biggest coal mine, proposed for the Galilee Basin) showed that it would probably destroy 3,000 jobs across Queensland and Australia, particularly in manufacturing, agriculture and tourism, plus $1,250 million of manufacturing activity lost.
Yes, hundreds of jobs are under threat if the Adani coal tax evasion project founders – at the Adani family company tax haven offices in the British Virgin Islands and Singapore. Canavan and Annastacia no doubt also see the fading of their post-politics cushy little number at the Adani emptorium.
And the Coalition Governments lapped it up, accepting overblown estimated benefits.
Since Adani’s presence in Oz there have been rumours & suggestions that their commercial dealings were less than squeaky clean. But, to my knowledge, no journalists here pursued the story. Likely due to our coal-obsessed Coalition governments & their protective media publishers.
This is a win-win: for Hindenburg who have acknowledged making money from this expose & for the public/investors who need to be aware of unethical practices.
Adani pulled off the most glorious con of the Australian (and incidentally, also the Indian) tax-payer…………….
…………by the time their Royalty Holiday expires you won’t be able to give coal away – so they will have extracted all our coal for nothing – and the best of luck in recouping anything from the Carmichael owners (headquartered in the Caribbean).
Likewise, their enormous Water Extraction Rights have no expiry date…………. which will make Barnaby look like Mother Theresa.
I’d expand on the guarantee given by the Australian tax-payer, but the moderator apparently doesn’t like that one so you will have to look it up for yourself……………….
The licence to deplete the aquifers is arguably the greatest tragedy for this country – quite apart from the results of coal exports.
Not forgetting the excise-free diesel for all those megamonster vehicles, earthmovers for the proposed to be open cut, the subsidised rail & port infrastructure and the local air & soil pollution.
Quite an achievement and let’s not forget – back by state & federal ‘Labor’ every foul step of the way, from go to woe.
And woe is will be.
“…backed by state & federal ‘Labor’…”
If you’d like a chuckle, look at the scams that Adani has pulled before…….
…….I particularly like the new Coal-fired plant built in a “Special Economic Zone” (basically tax and royalty free export) in India – to supply power to PAKISTAN (at a horrendous price).
https://www.nytimes.com/2019/08/15/climate/coal-adani-india-australia.html
https://www.washingtonpost.com/world/2022/12/09/india-coal-gautam-adani-godda/
You have to admire the sheer brass gall……………..
Beat me to it; doesn’t say much for Australian journalism when our media are too lazy to actually research a high profile individual &/or company? Or, does it signify self censorship by media outlets and journalists?
The ABC’s Stephen Long had a stab at throwing some light on the Adani group in October 2017, angling the story at tax avoidance in a Four Corners programme:
https://www.abc.net.au/news/2017-10-02/adanis-tax-haven-ties-to-british-virgin-islands-revealed/9007714
Which one guesses was never mentioned and never saw the light of day again, especially in news media….
The Queensland government that has fought tooth and nail for Adani is a Labor government.
Any company that claims to be “neutralising” its parent companies emissions is lying to your face. There is no way that fossil carbon, once emitted, can ever be vanished from the biosphere.
It is cynical for a fossil fuel company to be touting “renewables”, when it knows damn well that intermittent power from renewables must be levelled out using fossil power. If he was serious about reducing emissions, he would be buying nuclear power stations out of his own pocket.
Almost everyone knows that nuclear power is easily the most expensive form of energy available. The last two nuclear plant in UK and France came in a decade late and double budget. Strange considering that the company is one of the very big operators of nuclear power plant in Europe.
Everybody knows that nukes are cheaper by the dozen. The cost of electricity at the farm gate is of little interest to the consumer hundreds of kilometres away, especially when it is hopelessly intermittent like wind or solar. When you add the enormous cost of energy storage and special transmission lines to the storage, wind and solar become hopelessly expensive compared to nuclear. Consequently it is nuclear that presents the only realistic option for 100% nonfossil electricity – delivered on demand to the consumer.
The French are long experienced at bringing down the cost of nuclear power stations by serial production. The French fleet arose largely as a single design evolving slowly. The same design has been taken up in China where it has evolved again to provide the early workhorse as they expand into the years ahead. The giant Gen-III prototypes that Peter refers to have allowed the evolution of the simplified EPR2 design that will be proven in UK, then multiplied out in France, China and elsewhere. India has evolved its own design, too. It has 6 GW under construction, of indigenous and Russian designs.
“Hopelessly intermittent” .. have you heard of batteries? In SA theyre breaking record upon record supplying the state with 100% renewable energy and even exporting some. https://www.safa.sa.gov.au/environmental-s-governance/energy
(Reply to Jessica). Sure, I have heard of batteries. Have you heard how inadequate they are?
The South Australian battery can only hold six minutes of South Australian demand. To stand alone, the South Australian grid would have to be able to store weeks of demand, or cheat with most of their power generated by gas. Check it out – the link you just gave me says that SA generated 70% of its power from wind, solar, batteries and gas. “And gas”! They are confident that you will fail to check the fine print. If you do, compare how much power actually came from the batteries compared to gas. Negligible compared to a massive reliance on fossil gas. You have been cheated into thinking that SA generates 70% of its power from renewables – precisely because you do not check the facts.
If you want to see how much renewables can supply an on-demand grid, have a look at WA, which has a similar proportion to renewables as SA. However they are isolated from Victoria, so there is no room for shifty accounting. Yes, it is increasing its renewables, but WA is increasing its reliance on gas to keep pace! Now, do you agree that we must replace all use of gas by 2050?
Batteries only stabilize the variable input, they do not provide the main power, which is provided by generation at the time, which apparently came from renewables. Nice try…
The South Australian Battery can only hold six minutes of South Australian demand………………
ANY Coal-fired power station can only provide about the same amount of cover.
This is a silly denialist argument, which presupposes that ALL other sources of power have fallen over.
Trust me, if all other sources of power have gone offline at once, it’s probably due to the outbreak of WW3 and nobody would be worrying about “six minutes worth”.
The “French Fleet” you so admire are so old their capital cost has long been repaid. You may not have noticed, but nuclear plants share the same basic fault as coal-fired power stations – THEY CAN’T STAND THE HEAT. Did you miss the bit where during the last drought in Europe they had to SWITCH OFF the nuclear plants because there was not enough water for cooling and actually driving the turbines?
You say nuclear plants are cheaper by the dozen………
……..except nobody has successfully manufactured more than two at a time – and that took a decade.
It’s not the capital cost that kills them – it’s the running cost. Nuclear is at least four times more expensive to produce than wind power – which requires neither fuel nor 24 hour attention from a cast of thousands (It’s basically running on the knife-edge between going out and exploding).
Also you obviously missed the bit where not only was SA separated from the grid, but was also supporting a (still-connected) Victorian ALUMINIUM PLANT for two weeks…..
…..and never missed a beat.
(Reply to The Builder – “Batteries can only stabilise the variable input”) That is true, big batteries are useful to stabilise the frequency, but that is only on a fraction-of-a-second by fraction-of-a-second basis. However they cannot store enough energy to provide full grid power through a still night, let alone a bad season. Anyone who tells you that we can achieve 100% nonfossil power with renewables-plus-batteries is lying to your face. To get to 100% you would have to include nuclear, where the fuel provides years of power.
Perhaps you should try to explain that to all those mugs who are spending billions of dollars getting into battery storage…………….
………..or (shock! horror!) try asking them why?
https://www.saurenergy.com/solar-energy-news/the-top-5-largest-battery-energy-storage-systems-worldwide
Let’s not pretend that battery storage is the only storage solution.
Pumped hydro is still the biggest grid level storage solution. It is also cheaper than batteries (and Nuclear) and lasts longer.
Hi Wayne. Yes, pumped hydro is an option where there is enough topography. Australia is short on for the required topography.
“ANU finds 22,000 potential pumped hydro sites in Australia”
https://www.anu.edu.au/news/all-news/anu-finds-22000-potential-pumped-hydro-sites-in-australia
It would seem that there are a lot of potential places for pumped hydro.
Also, it is possible to use mine sites to create pumped hydro.
https://genexpower.com.au/world-first-australian-project-repurposing-mine-pits-for-pumped-hydro/
“22,000 potential hydro storage sites” is a deceitful meme that has been around for years. It is not research, but a marketing meme, directed at trusting people who think that after a few more filters, the dataset would have enough energy storage for a 100% renewables-powered Australia. However, those few filters have never been applied, or at least the resulting empty dataset is never reported to the public.
The first filter ran across the topography, selecting pairs of locations with a height difference of 300 m or so. Subsequent filters would be quite straightforward for a postgrad student to apply: – significant volume in the upper valley with a feasible dam; access to high tension power lines; access to a copious freshwater supply to replace evaporation; absence of sacred sites; absence of rare animals and plants, access to concrete supply, etc. On top of that, you would have to get permission from Dr Bob Brown and friends to flood all those valleys. I think you’ll find the reason we haven’t heard of the vast fleet of eligible valleys, is because it don’t exist.
The author of the article in that link is confident that the reader is a dumb schmuck who fails to check that 450 GWh would be enough storage. Considering that by 2050, the Australian grid(s) must deliver about 50 GW through all contingencies, that much storage is only nine hours, not even enough to get us through a still winter night. Let alone a bad season!
Do you actually understand the concept of pumped hydro?……………
Making use of effectively free electricity during the day to pump water uphill, for later use.
i.e. the amount of storage is available EVERY DAY.
So 450GWh (which would only be required for the three hours of demand every day when the sun wasn’t shining) would be more than enough.
Even with the amounts of solar and wind already built we are getting significantly closer to 100% renewables.
https://reneweconomy.com.au/graph-of-the-day-solar-covers-all-of-south-australia-demand-for-six-hours-straight/
I seems that anything which doesn’t jibe with your nuclear fantasy you dismiss as biased or “fake news”.
Where would you have contracted that disease, one wonders……………………..
(Reply to Thucyclides). It would be wrong to suggest that power stations don’t need energy storage. Coal-fired power stations maintain significant energy storage in the form of coal heaps. In the US the average coal reserves are 100 days, with similar coal reserves elsewhere around the world. Nuclear power stations have several years of fuel inside the reactor, and may have the next load of fuel hanging up in the back shed. Gas-fired power stations have only the amount of gas compressed in the pipeline, relying for reserves on gas wells hundreds of kilometres away. Renewables in the form of wind or solar has absolutely no reserves at all. Batteries are too small to supply grid power and always will be.
Power stations can be used to create fresh water rather than consume it. Modern power stations are being built adjacent to seawater for cooling, where the condenser heat could be used for desalination. Inland power stations (such as Kogan Creek in QLD) rely on air cooling.
As the deadline to replace all fossil fuels approaches, we must provide a massive expansion in nonfossil power. Not just for domestic electricity, but also for electrolytic aluminium, steel, cement and synthetic fuels. That can only be done with nuclear. It is foolish to suggest that renewables, backed by gas, can do the job, when in fact the gas itself must be eradicated.
“Renewables in the form of wind or solar has absolutely no reserves at all……”
More utter gibberish.
The sun is good for at least another five billion years.
If you understand what causes the wind to blow you’d also appreciate that when you consider that the NEM is FOUR THOUSAND SQUARE KILOMETRES the wind will ALWAYS be blowing somewhere.
Ever wonder why they call them “Trade Winds”?
Familiar with the term “Redundancy”?
If you had bothered to follow the links you’d see that batteries are being built that are quite capable of providing the excess power required (for the approximately three hours per day when it is actually required).
May I remind you that Kogan Creek falls over at twice the rate of supposedly less reliable earlier coal plants.
Or that the vast majority of power outages are caused by coal-fired power stations (over 100 times last year alone)
And where exactly are these “modern power stations” being built by the sea?
You should also understand that steam turbines CANNOT use anything but fresh water for generation due to the intense heat and pressure generated inside them. Any pollutants quickly chew up the turbine blades. Also you simply could not create fresh water from sea water at a rate sufficient to supply a steam turbine.
Do you understand that both solar and wind go from input to electricity with no intermediate stage required? Or that the vast majority of the heat generated by ANY form of heatr source (including nuclear) is wasted? Only a very small percentage is converted to electricity.
Please don’t whinge about “overnight demand” – because basically there isn’t any. It’s amazing how little power people consume when they are asleep. What residual demand there is when the “Sun don’t shine” is largely artificial anyway, a left over from when the grid was first built and they had to find some way of soaking up coal power at night when there was no real demand. Hence “off-peak” electricity.
Nuclear power is just way too expensive, has ALL the downside of coal-fired power stations (plus a few of it’s own) and takes way too long to build.
I watched a video last night about the economics of nuclear power plants.
The basic conclusion was that it took a nuclear power station approximately 16 years to break even, whereas a gas plant was 3 or 4 years.
Of the 674 nuclear power stations built since 1950, NOT A SINGLE ONE has ever produced a profit………………
………the average LOSS is EUR4.8 BILLION.
Without massive government subsidies, the whole concept is a disaster.
The reason “…NOT A SINGLE ONE has ever produced a profit…” must be because the electricity produced is ..too cheap to meter” as was the selling point from the outset.
Oh, wait…
Well they could hardly sell the real reason for the initial interest…………..
……….a convenient source of Plutonium to fuel the nuclear weapons program.
The Hindenburg Report, what an obviously apt name…
…. and that is where they proudly proclaim they got the name!
Adani has a long history of bribing polititions. Ours are pretty cheap so he probably bought the lot.