What are the 88 questions Hindenburg Report asked Adani Group?

With Hindenburg Research vs ani Group saga continuing, focus has drawn to 88 questions that US-based financial research firm asked in its report. 

Hindenburg said its report was based on two years of investigation. Since release of report, ani Group has rejected short-seller Hindenburg's claims.  US-based financial research firm has rebutted 413 p ani response to its report. Hindenburg continues to say that ani Group has t responded to specifics of 88 questions that it raised.

What are 88 questions Hindenburg Research asked ani Group?

questions by Hindenburg Research are unedited:

1. Gautam ani’s younger bror, Rajesh ani, was accused by Directorate of Revenue Intelligence (DRI) of playing a central role in a diamond tring import/export scheme around 2004-2005. He was subsequently arrested twice over allegations of customs tax evasion, forging import documentation and illegal coal imports. Given his history, why was he subsequently promoted to serve as Managing Director at ani Group?
2. Gautam ani’s bror-in-law, Samir Vora, was accused by DRI of being a ringleer of a diamond tring scam and of repeatedly making false statements to regulators. Given his history, why was he subsequently promoted to Executive Director of critical ani Australia division?
3. As part of DRI investigation into over-invoicing of power imports, ani claimed that Vid ani was “t at all having any involvement in any ani Group of companies”, except as shareholder. Despite this claim, a pre-IPO prospectus for ani Power from 2009 detailed that Vid was director of at least 6 ani Group companies. Were ani’s original statements about Vid, me to regulators, false?
4. What has been full extent of Vid ani’s role in ani Group to date, including all roles on deals and entities that have transacted with ani Group?
5. Mauritius-based entities like APMS Investment Fund, Cresta Fund, LTS Investment Fund, Elara India Opportunities Fund, and Opal Investments collectively and almost exclusively hold shares in ani-listed companies, totaling almost U.S. $8 billion. Given that se entities are key public shareholders in ani, what is original source of funds for ir investments in ani companies?
6. Recent right-to-information requests confirm that SEBI is investigating ani’s foreign fund stock ownership. Can ani confirm that this investigation is ongoing and provide details on status of that investigation?
7. What information has been provided thus far as part of any investigations, and to which regulators?
8. Entities associated with Monterosa Investment Holdings collectively own at least U.S. $4.5 billion in concentrated holdings of ani Stock. Monterosa’s CEO served as director in 3 companies alongside fugitive diamond merchant Jatin Mehta, whose son is married to Vid ani’s daughter. What is full extent of relationship between Monterosa, its funds, and ani family?
9. What is extent of ani Group Companies, and any Vid ani related entities’ dealings with Jatin Mehta?
10. A once-related party entity of ani called Gudami International, heed by close ani associate Chang Chung-Ling, invested heavily in one of Monterosa funds that allocated to ani Enterprises and ani Power. Monterosa entities continue as key Mauritius shareholders in ani companies. What is ani’s explanation for this large, concentrated investment into ani listed companies by a related-party entity?
11. What was original source of funds for each of Monterosa funds and ir investments in ani?
12. A former trer for Elara, a firm with almost $3 billion in concentrated holdings of ani shares, including a fund that is 99% concentrated in shares of ani, told us that it is obvious that ani controls shares. He ded that structure of funds is intentionally designed to conceal ir beneficial ownership. How does ani respond?
13. Leaked emails show that CEO of Elara h dealings with torious stock manipulator Dharmesh Doshi, partner of Ketan Parekh, even after Doshi became a fugitive for his alleged manipulation activity. How does ani respond to this relationship, given that Elara is one of largest “public” holders of shares of ani?
14. What was original source of funds for Elara funds and ir investments in ani?
15. ani has worked extensively with international incorporation firm Amicorp, which has established at least 7 of its promoter entities, at least 17 offshore shells and entities associated with Vid ani, and at least 3 Mauritius-based offshore shareholders of ani stock. Amicorp played a key role in 1MDB international fraud scandal, according to book Billion Dollar Whale and U.S. legal case files, along with files from Malaysian anti-corruption commission. Why has ani continued to work closely with Amicorp despite its proximity to a major international fraud and money laundering scandal?
16. New Leaina is a Cyprus-based investment firm, which held ~95% of its holdings in shares of ani listed companies, consisting of over U.S. $420 million. entity is operated by Amicorp. What was original source of funds for New Leaina and its investments in ani?
17. Opal Investment Private Ltd. is largest claimed independent holder of shares of ani Power, with 4.69% of company (representing ~19% of float). It was formed on same day, in same jurisdiction (Mauritius) by same small incorporation firm (Trustlink) as an entity associated with Vid ani. How does ani explain this?
18. What was original source of funds for Opal and its investments in ani?
19. Trustlink’s CEO touts its close relationship with ani. same Trustlink CEO was previously alleged by DRI to have been involved in a fraud using shell companies with ani. What are full details of Trustlink’s CEO’s dealings with ani Group, including those detailed in DRI investigative records?
20. above-named offshore entities holding concentrated positions in ani stock accounted for up to 30%-47% of yearly delivery volume in ani stocks, a massive irregularity, according to our analysis of data from Indian exchanges and disclosed tring volume per ani filings. How does ani explain extreme tring volume from this concentrated group of opaque offshore funds?
21. nature of this tring suggests that se entities are involved in manipulative wash tring or or forms of manipulative tring. How does ani respond?
22. In 2019, ani Green Energy completed two offerings for sale (OFS) that were critical for ensuring that its public shareholders were above 25% listing threshold requirement. What portion of se OFS deals were sold to offshore entities, including Mauritius and Cypriot entities named in our report?
23. Indian listed corporates receive a weekly shareholding update, t disclosed to public, which would detail shareholding changes around deals. Will ani detail full list of offshore entities that participated in OFS deals?
24. ani chose Monarch Networth Capital to run OFS offerings. An ani private company has a small ownership stake in Monarch, and Gautam ani’s bror-in-law h previously purchased an airline toger with firm. This close relationship seems to pose an obvious conflict of interest. How does ani respond?
25. Why did ani choose Monarch Networth Capital, a small firm previously suspended and sanctioned by SEBI over allegations of market manipulation, to run offerings, rar than a large, well-respected broker?
26. Mr. Robbie Singh, Group CFO at time shareholding issue erupted in public forums in 2021, claimed in an NDTV interview on June 16th 2021 that funds like Mauritius shareholders h t me fresh investments and h come to own shares of or ani stocks through vertical demergers. Our analysis shows that it was almost certain that Mauritius shareholders me furr investments in ani Green. This coincides with time when promoters were required to bring ir shareholding down to meet public shareholding rms. How does ani Group respond to this new evidence?
27. Our findings indicate that SEBI has investigated and prosecuted more than 70 entities and individuals, including ani promoters, for manipulating ani stock between 1999 to 2005. How does ani respond?
28. A SEBI ruling determined that ani promoters aided and abetted Ketan Parekh in manipulation of shares of ani Exports (w ani Enterprises), showing that 14 ani private companies transferred shares to entities controlled by Parekh. How does ani explain this coordinated, systematic stock manipulation in its shares, toger with one of India’s most torious convicted stock fraudsters?
29. In its defense, ani Group claimed it h dealt with Parekh and his stock manipulation efforts to finance operations at Mundra port. Does ani view extraction of capital through stock manipulation as a legitimate method of financing?
30. Individuals close to Ketan Parekh have told us that he continues to work on transactions with his old clients, including ani. What was and is full extent of relationship between Parekh and ani Group, including eir entity’s relationship with Vid ani?
31. Given that ani Group promoters pledge shares as collateral for loans, wouldn’t stock manipulation artificially inflate collateral and borrowing base for such loans, posing a significant risk for promoters’ counterparties and, by proxy, ani shareholders who would suffer at hands of a collateral call or deleveraging via equity sale?
32. In 2007, an Ecomic Times article described a deal whereby a broker controlled by Dharmesh Doshi, a fugitive associated with Ketan Parekh, bought shares in a pharmaceutical company for a BVI entity where Vid ani served as shareholder and director. What was and is full extent of relationship between Dharmesh Doshi and ani Group, including with Vid ani?
33. What is explanation for a Vid ani entity receiving an alleged U.S. $1 million as part of a transaction with Jermyn Capital, broker entity previously run by Dharmesh Doshi, at time a fugitive and wanted market manipulator?
34. Investors generally prefer clean and simple corporate structures to avoid conflicts of interest and accounting discrepancies that can lurk in sprawling, convoluted structures. ani’s 7 key listed entities collectively have 578 subsidiaries and have engd in a total of 6,025 separate related-party transactions in fiscal year 2022 alone, per BSE disclosures. Why has ani chosen such a convoluted, interlinked corporate structure?
35. We found at least 38 Mauritius-based entities associated with Vid ani and Subir Mittra ( he of ani private family office). We also found Vid ani associated entities in or tax haven jurisdictions like Cyprus, UAE, Singapore, and various Caribbean islands. Several of se entities have transacted with ani entities without disclosing related party nature of dealings, seemingly in violation of law, as evidenced throughout our report. What is explanation for this?
36. How many entities is Vid ani associated with as eir director, shareholder, or beneficial owner? What are names and jurisdictions of se entities?
37. What are full details of Vid ani-associated entities’ dealings with private and listed entities in ani empire?
38. We found websites for 13 Vid ani entities that seem like rudimentary efforts to demonstrate that entities have operations. Many websites were formed on exact same day and listed same set of nsensical services such as “consumption abro” and “commercial presence”. What business or operations do each of se entities actually eng in?
39. One of websites for a Vid ani-associated entity claimed “we tre in Services such as sale and delivery of an intangible product, like a Service, between a producer and consumer.” What does that even mean?
40. A Vid ani-controlled Mauritius entity w called Krunal Tre & Investment lent INR 11.71 billion (U.S. ~$253 million) to a private ani entity without disclosure of it being a related party loan. How does ani explain this?
41. A Vid ani-controlled UAE entity called Emerging Market Investment DMCC lists employees on LinkedIn, has substantive online presence, has anunced clients or deals, and is based out of an apartment in UAE. It lent U.S. $1 billion to an ani Power subsidiary. What was source of Emerging Market Investment DMCC funds?
42. A Vid ani-controlled Cyprus entity called Vakoder Investments has signs of employees, substantive online presence, and clear operations. It h an investment of U.S. ~$85 million in an ani private entity without disclosure that it was a related party. How does ani explain this?
43. What was source of Vakoder funds?
44. We have identified a series of transactions from 2013-2015 whereby assets were transferred from a subsidiary of listed ani Enterprises to a private Singaporean entity controlled by Vid ani, without disclosure of related party nature of se deals. What is explanation for se transactions and lack of disclosure?
45. private Singaporean entity controlled by Vid ani almost immediately wrote down value of transferred assets. Were those still held on books of ani Enterprises, it likely would have resulted in an impairment and significant decline in reported net income. What is explanation for why se assets were transferred to a private undisclosed related party before being written down?
46. We found that a “silver bar” merchant based at a residence with website and obvious signs of operations, run by a current and former ani director, lent INR 15 billion (U.S. $202 million) to private ani Infra with disclosure of it being a related party transaction. What is explanation for lack of required disclosure?
47. What was purpose of loan, and what was original source of “silver bar” merchant’s funds?
48. Gardenia Tre and Investments is a Mauritius-based entity with website, employees on LinkedIn, social media presence, and apparent web presence. One of its directors is Subir Mittra, he of ani private family office. entity lent INR 51.4 billion (U.S. $692.5 million) to private ani Infra with disclosure of it being a related party loan. What is explanation for lack of required disclosure?  
49. What was purpose of loan, and what was original source of Gardenia Tre and Investments funds?
50. Milestone Trelinks, ar claimed silver and gold merchant also run by a longstanding employee of ani Group and a former director of ani companies, invested INR 7.5 billion (U.S. $101 million) into ani Infra. Once again re was disclosure of it being a related party loan. What is explanation for lack of required disclosure?  
51. What was purpose of loan, and what was original source of Milestone Trelinks funds?
52. Ar secretive Mauritius entity called Growmore Tre and Investment netted an overnight U.S. ~$423 million gain through a stock merger with ani Power. According to court records, Growmore is controlled by Chang Chung-Ling, an individual who shared a residential dress with Vid ani and h been named in DRI fraud allegations as director of a key intermediary entity used to siphon funds out of ani Enterprises. What is explanation for this windfall gain to an opaque private entity controlled by a close associate of ani family?
53. What is nature of Chang Chung-Ling’s relationship with ani Group, including his relationship with Vid ani?
54. Listed ani companies have paid INR 63 billion to private contractor PMC Projects over past 12 years to help construct major projects. A 2014 DRI investigation called PMC Projects a “dummy firm” for ani Group. Given that constructing major projects is ani’s business, is PMC Projects in fact just a “dummy firm”?
55. PMC Projects has current website. Historical captures for its website show that it shared an dress and phone number with an ani company. Numerous employee LinkedIn profiles show that y work concurrently at both. Several expressed confusion at wher re was any difference. Is PMC Projects a mere “dummy firm” for ani?
56. Newly revealed ownership records show that PMC Projects is owned by son of Chang Chung-Ling, close associate of Vid ani mentioned above. Taiwanese media reports that son is “ani Group’s Taiwan representative”. We found pictures of him literally holding an ani sign at an official government event, where he represented ani. Once again, is PMC projects a mere “dummy firm” for ani, as earlier alleged by government?
57. If so, why hasn’t eir company reported its extensive dealings as being related party transactions, as required?
58. In FY20, iCorp Enterprises only generated INR 6.9 million (U.S. $97,000) in net profit. That same year, 4 ani Group companies entities lent it U.S. ~$87.4 million, or more than 900 years of iCorp net income. se loans seemed to make little financial sense. What was underwriting process and business rationale that went into making se loans?
59. iCorp almost immediately re-lent 98% of those loans to listed ani Power. Was iCorp simply used as a conduit to surreptitiously move funds into ani Power from or ani Group entities and side-step related party rms?
60. Why have listed ani companies paid private ani entity “ani Infrastructure Manment Services” INR 21.1 billion (U.S. $260 million) over past 5 years, given that listed companies’ business is also managing infrastructure?
61. Listed company ani Enterprises paid U.S. $100 million to a company, ultimately held by private trust of ani family in British Virgin Islands (BVI), a torious Caribbean tax haven, with claimed rationale being to pay a security deposit to use an Australian coal terminal. Why did listed company need to pay such lucrative fees to ani’s private interests?
62. ani Enterprises has h 5 chief financial officers over course of 8 years, a key red flag suggesting potential accounting irregularities. Why has ani Enterprises h such a difficult time retaining someone for its top financial position?
63. What were reasons for resignations or terminations each of se prior CFOs?
64. ani Green Energy, ani Ports and ani Power have each h 3 CFOs over 5 years, while ani Gas and ani Transmission have both h CFO turver within past 4 years. Why have ani entities struggled to retain individuals at its top financial positions?
65. What were reasons for resignations or terminations each of se prior CFOs?
66. independent auditor for ani Enterprises and ani Gas is a tiny firm called Shah Dhandharia. Historical archives of its website show that it h only 4 partners and 11 employees. It seems to have current website. Records show it pays INR 32,000 (U.S. $435 in 2021) in monthly office rent. only or listed entity we found that it audits has a market capitalization of about INR 640 million (U.S. $7.8 million). Given complexity of ani’s listed companies, with hundreds of subsidiaries and thousands of interrelated dealings, why did ani choose this tiny and virtually unkwn firm inste of larger, more credible auditors?
67. audit partner at Shah Dhandharia who signed off on ani Gas’ annual audits was 23 years old when he began approving audits. He h just finished university. Is that individual really in a position to scrutinize and hold to account financials of a firm controlled by one of world’s most powerful individuals?
68. audit partner at Shah Dhandharia who signed off on ani Enterprises annual audits was as young as 24 years old when he began approving audits. Is that individual really in a position to scrutinize and hold to account financials of a firm controlled by one of world’s most powerful individuals?
69. audit partners signing off on ani Gas and ani Enterprises annual audits are w both 28 years old. Again, are y in a position to credibly scrutinize and hold to account financials of firms controlled by one of world’s most powerful individuals?
70. auditor for ani Power, an Ernst & Young affiliate, gave a “qualified” opinion in its audit, saying that it h way to support value of INR 56.75 billion (U.S. ~700 million) in investments and loans held by ani Power. What is ani Power’s full explanation for valuation of se investments and loans?
71. Which parts of valuation of ani Power’s investments and loans did auditor disagree with?
72. ani has been subject to numerous allegations of fraud by DRI and or government ncies. In 2004-2006 diamond scandal investigation, government alleged that ani Exports Ltd (renamed ani Enterprises) and related entities’ exports were 3x total exports of all or 34 firms in industry group put toger. How does ani explain that sudden surge in tring volume?
73. diamond export investigation also demonstrated role played by Vid ani and entities in UAE, Singapore and Hong Kong that were used to facilitate back-and-forth movement of money and product. How does ani explain all tring that took place with entities associated with Vid ani?
74. In 2011, parliamentary Ombudsman for Karnataka state issued a 466-p report describing ani as “anchor point” for a massive INR 600 billion (U.S. $12 billion) scam involving illegal importation of iron ore, alleging that ani h bribed all levels of government in facilitation of scheme. What is ani’s response to investigation and extensive evidence presented as part of se findings?
75. In 2014, DRI once again accused ani of using intermediary UAE-based shell entities controlled by Vid ani to siphon funds, in this case through over-invoicing of power equipment. Did ani invoice power equipment purchases to UAE-based entities such as Electrogen Infra FZE? If so, why?
76. Was re a markup from original purchase price for equipment? What services did Vid ani-associated entities provide that would have justified a markup?
77. same DRI investigation found that Vid ani’s intermediary entity sent ~$900 million to a privately owned ani entity in Mauritius. What is explanation for se transactions?
78. Where did money from se transactions go after it was sent to a private ani entity in Mauritius?
79. DRI investigation also documented many or transactions through Vid ani intermediary entity, which were t probed furr by investigators. What is ani’s explanation for se or transactions?
80. In yet ar scandal, ani was accused of over-valuing coal imports through shell entities in Dubai, UAE, Singapore, and BVI. Did ani transact with entities in se jurisdictions? If so, which ones and why?
81. In 2019, Singaporean entity Pan Asia Coal Tring won a coal supply tender floated by ani Group. Pan Asia Coal Tring’s website provides details on its coal tring experience, r does it name a single individual associated with company. Why did ani Group select such a small firm for coal supply? What was due-diligence process that went into its selection?
82. Corporate records show that a former ani Group company director was a director and shareholder of Pan Asia. Why didn’t ani Group disclose potential conflict of interest in transaction?
83. In same year as winning coal deal in 2019, Pan Asia Coal Tring lent U.S. $30 million to a private entity of ani Group, per Singaporean corporate records. Why did a private company of ani family take money from a small single shareholder entity in Singapore at same time its listed company was awarding a coal supply deal to it?
84. In interviews, Gautam ani has said “I have a very open mind toward criticism.” Given this, why did ani seek to have critical journalist Paranjoy Guha Thakutra jailed following his articles on allegations of ani tax evasion?
85. In same interview, Gautam ani said “Every criticism gives me an opportunity to improve myself.” Given this, in 2021, why did ani seek a court gag order on a YouTuber that me critical videos of ani?
86. In same interview, Gautam ani said “I always introspect and try to understand ors’ point of view.” Given this, why has ani Group filed legal suits against journalists and activists, which have been condemned by media watchdogs? Why did it have an activist in Australia followed by private investigators?
87. If ani Group has thing to hide, why does it feel need to pursue legal action against even smallest of its critics?
88. Does ani Group truly view itself as an organization with sound corporate governance that embodies its slogan, “Growth With Goodness?”

ani Group's reply to Hindenburg Research's questions:

In its 413 p response, ani Group stated that, "t one of se 88 questions is based on independent or journalistic fact finding. y are simply selective regurgitations of public disclosures or rhetorical innuendos colouring rumours as fact." statement went on to say that, " report seeks answers to “88 questions” – 65 of se relate to matters that have been duly disclosed by ani Portfolio companies in ir annual reports available on ir websites, offering memorandums, financial statements and stock exchange disclosures from time to time. Of balance 23 questions, 18 relate to public shareholders and third parties (and t ani portfolio companies), while balance 5 are baseless allegations based on imaginary fact patterns." 

Here's ani group's full 413-p response:

ani Response to Hindenburg January 29 2023 by Republic World on Scribd