When Adani’s son Karan** Adani got married at a resort in Goa, there was a large line-up of VIP guests. The list included India’s biggest billionaires, from politicians to bank officials.
During the two-day wedding ceremony, most of the guests came to the reception the night before, had a meal, blessed the bride and groom, and left immediately.
But there was only one friend of Adani running around the resort like an uncle, welcoming all the guests with a smile and overseeing the ceremony and food. Gujarat Chief Minister Narendra Modi’ (Forbes Magazine https://www.forbes.com/sites/forbeswealthteam/2023/01/26/who-is-gautam-adani-the-indian-billionaire-that-short-seller-hindenburg- says-is-running-a-corporate-con/?sh=3cf8d0b9d535 )
When we look at the list of the world’s richest people, we usually see a brand or product behind every name. Microsoft Windows for Bill Gates, Oracle for Larry Ellison, Amazon for Jeff Bezos, Tesla cars for Elon Musk etc.
None of these would be stock investors like Warren Buffett. In any case, everyone knows their life, their business, the products they make and their brand, every step of their growth. Some who are nothing like that will suddenly rise and fall like yes.
There are many methods for that too. It is an important one Hindenburg accuses Adani of stock manipulation. Malayalam newspapers generally write about stock fraud or thirimari. That translation is not very accurate.
You may have seen a lot of WhatsApp forwards and YouTube videos last week explaining the aforementioned stock scam. Examples of videos from bicycle, buffalo, pappadam to rocket. Here too an attempt can be made to explain the stock manipulation with the remaining cow rearing and goat farms.
Your name is Gautham. You have three cows. You live comfortably by milking it and selling it, and you feel the desire to become a very rich man one day.
If you want to earn and earn and become a millionaire, you will end up in a pit. So you decide to go to the stock market. Not as an investor, but as a receiver of investment.
You inform SEBI that you have a company with three cows, its valuation is Rs 1 lakh and you intend to sell it through the stock market in thousand shares of Rs 100. Out of a thousand shares, you will buy 9000 yourself and sell the remaining 100 to retail investors.
And that’s where the fraud begins. Now you have 900 shares in your hand which is Rs 90,000. 100 shares in the hands of investors, that is Rs.10,000. The stock remains the same, the price neither rises nor falls. When you are worried about what to do next, you google Ketan Parekh’s tricks and understand.
Ketan Parekh
In the next step you call your brother Vinod who is involved in money laundering and other activities in Mauritius and ask him to buy the stock of the cow company from retail investors for Rs 1,000 instead of Rs 100. Thus your company stock value increases tenfold.
There are news stories about you in the press, YouTube stock advisors are advising you to buy your company stock. Some old poor people are buying stock in your cow company by pledging their necks and selling their beds. So again the stock price becomes Rs 2,000 again.
Now you have 900 stocks of 2,000, or Rs 18,00,000. So you became rich through stock manipulation. It’s just beginning there.
The stock of eighteen lakhs in your hands are just pieces of paper, or PDF documents. Your income is still money from milking the old cow and selling the milk.
For the share to be useful it must be converted into cash. You see a bank manager with these pieces of paper. You ask the bank manager that you have a share of eighteen lakhs in your hand and pledge it to take a loan of at least Rs.15 lakhs.
The bank manager is not a retail person, he studied B-Tech for four years and then cleared supply for two years, after that he went for bank exam coaching for one year and passed the bank test. Bank managers can recognize fraud at a glance.
He immediately tore up your application and threw it in the trash and kept the dialogue that I can’t afford to give a loan of fifteen lakhs to you who have assets of just three cows.
Undeterred, you go to the nearest telephone booth and call your friend Narendra in Delhi. Narendran calls the bank manager and asks him to give a loan to Maryada if she wants to get a job and a pension to support her family.
You get a loan of 15 lakhs. Vinod and Narendra’s share is given to them and the remaining money is spent and with the remaining money, they buy five or six goats and start a goat farm. The old program continues.
A goat farm is valued at 25 lakhs and sells 1 lakh shares of Rs.25 in the stock exchange. Vinod is called, Narendan is called, takes a loan, becomes a millionaire.
Then the next problem that Hindenburg mentioned begins. Excessive debt, or debt distress. You still have a total of three cows and six goats as assets. Debt runs into crores.
Can’t do it without paying the debt. A typical country scammer’s method, The first person will be given ten percent return from the next month and will take the money. Next month another person will be added to the same program and the first person will be given the said profit.
Next month I will buy it from someone else and give it to the first two people. This continues until finally breaking at some point. The program is known as a Ponzi scheme, named after Charles Ponzi, a great fraudster who lived in Boston in the 1920s.
Charles Ponzi
But your business cannot have this scheme. Because there are only four or five banks in the country, so fraud will not last long. The loan can only be repaid, there is no other option.
You call Narendra again. Narendra writes a coal field in your name. It goes on the stock exchange. The previously mentioned program is repeated and the old debts are paid off.
Narendran then writes you a port, then an airport, then another port, another airport. Finally writing on your behalf till Dharavi. Have you ever heard of Dharavi Dharavi, Dharavi was evicted by Mohanlal in one night.
This is Hindenburg’s pattern of stock fraud and debt. One of the problems is the meager retail shares. For two reasons, the more shares out there, the less chance there is of fraud.
One, if there are more shares out there, it takes a lot of money to manipulate them, and two, once the manipulation is done, the profits are shared with the retail investors. Promoters won’t matter much.
For this reason, to reduce fraud, stock exchanges all over the world will set a requirement that the minimum percentage of shares should be issued.
In India it is 25%. Hindberg demonstrates with data from the stock exchange itself that many companies in the Adani group do not comply.]
Moreover, the issued stocks have been bought and held by Adani’s benami. Therefore, they can raise and lower the stock price at any time. As for the original investors, Gopi.
Stock exchanges have a lot of regulations to catch and prevent such stock manipulations. It is also an allegation that SEBI is not following any of these. Adani’s son’s father-in-law sits on committees that are supposed to control manipulations at SEBI.
This is where the relationship between Adani and Ketan Parekha comes into play in the Hindenburg Report. Ketan Parekh is the concubine of stock flippers and scammers.
Simply put, Ketan Parekh, who is also Harshad Mehta’s disciple, was doing the work of artificially raising the stock value as mentioned above by buying black money and white money from corporate capitalists.
Harshad Mehta
For example, Ketan Parekh increased the share value of Zee Telefilm from 127 to 10,000. After his scams were exposed, there was a huge stock exchange crash in 2001 and Ketan Parekh was arrested.
A Joint Parliamentary Committee (JPC) was then set up and found Ketan Parekh guilty, sentenced him to one year in prison and barred him from the stock exchanges.
It is an open secret among traders that even though Guru Harshad Mehta died in jail, Ketan Parekh is still living the scam under various names. It is Ketan Parekh who comes back in the Hindenberg report as the one helping Adani in stock manipulation.
Ketan Parekh’s assistant Dharmesh Doshi, who escaped from India without being caught by the police, and Raj Bhat, the CEO of the company Hindenberg accuses Hindenberg of transporting money from Mauritius to India for Adani, Elora Capital, which we mentioned in the last part, are in the e-mails leaked by Hindenberg.
Hindenberg also released details of the transfer of 3.4 billion rupees ($75 million) by Adani’s 14 companies to Ketan Parekh’s 11 companies. They allege that this is just one of many transfers to manipulate the stock.
( to be continued )
**Married to Karan Adani ‘Cyril Amarchand Mangal Das’ The head of the company is the daughter of Cyril Shroff. Cyril Shroff’s daughter, aka Karan Adani’s wife Preeta Shroff He is one of the partners of the same company.
The reason is that most of the Malayalis have heard about this organization The Pinarayi government entrusted this firm to prepare the Kerala government’s tender for the Thiruvananthapuram airport.
Naturally, Kerala lost the tender. Adani won. At that time, there was an allegation that Kerala lost because this company leaked the Kerala government’s tender to Adani. A failure like this happened to the government either due to the lack of attention of the officials or due to collusion.
Either way, there should have been an investigation and action as soon as this incident took place, because one of the biggest institutions built with tax money by the people of Kerala was abandoned.
It has been three years since the incident, but the Kerala Chief Minister still has an obligation to explain to the people what action was taken in this fallout. People have the responsibility to ask. Cyril Shroff is also holding another post, SEBI’s committee to detect corporate fraud!
Read the first part of this article here
Content Highlight: Farooq writes on Hindenburg report on Adani, Part 2
