Adani Enterprises, the flagship publicly traded company operated by Adani Group and one of the largest companies in India, will be removed from the Dow Jones Sustainability Indices next week following claims that the multinational conglomerate benefited from money laundering.
The valuation of the firm run by Gautam Adani, who is one of the richest men in the world, was artificially inflated by “a brazen stock manipulation and accounting fraud scheme over the course of decades,” according to a two-year investigation from American forensic financial company Hindenburg Research released last week. Analysts uncovered shell companies and diamond trading scams operated by family members to inflate the stock price of the firm.
Adani Enterprises, which has lost more than $100 billion on the stock market, will therefore be removed from the Dow Jones Sustainability Indices over the “allegations of stock manipulation and accounting fraud.” The company is listed on the Sustainability Emerging Markets Index, which also includes companies from China as well as other developing economies.
The investment products are advertised as “best-in-class benchmarks for investors who have recognized that sustainable business practices are critical to generating long-term shareholder value and who wish to reflect their sustainability convictions in their investment portfolios.” Adani Enterprises likewise told the United Nations that the company supports the Global Compact, a voluntary initiative based on commitments to implement “universal sustainability principles” such as human rights, labor, environment, and anti-corruption measures. The firm published a lengthy sustainability report reflecting adherence to the environmental, social, and corporate governance movement, also known as ESG.
Adani Group is involved in sectors such as port management, electric power, mining, oil and gas, renewable energy, and food processing. Shares for Adani Enterprises have declined from 3,442 rupees ($40.58) on the day Hindenburg Research published the results of the investigation to 1,531 rupees ($18.59) on Friday. Hindenburg Research said they took a short position in the company through American-traded bonds and various derivatives. Adani plummeted from the third richest person on the planet to the 17th following the release of the report last week.
Adani Group published a document calling Hindenburg Research executives the “Madoffs of Manhattan” and said their investigation was based upon “selective misinformation and concealed facts.” The company also accused Hindenburg Research of launching an “attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” leading the investors to rebut that the document “largely confirmed our findings and ignored our key questions.”
Adani Group follows several other fraudulent firms which have taken advantage of investors’ appetites for socially conscious companies.
Elizabeth Holmes, the founder of defunct healthcare venture Theranos, garnered widespread recognition as one of the most successful female entrepreneurs in Silicon Valley history before she was sentenced to federal prison on fraud charges. Sam Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX who lost billions in customer assets by commingling the funds with his trading firm, admitted to a reporter that ESG has been “perverted beyond recognition” and boasted that he generated trust among “woke westerners” through emphasizing his self-professed “effective altruism.”
Pfizer was named one of the “most sustainable companies” in the world days before Project Veritas released footage of an official appearing to admit that the pharmaceutical firm was considering mutating coronaviruses. Elon Musk recently said on social media that “the S in ESG stands for Satanic” and has formerly called the investment philosophy a “scam” that has been “weaponized by phony social justice warriors.”