Adani says business as usual in Qld despite fraud allegations

Adani Australia says it’s business as usual at its extensive coal operations in Queensland despite a short-selling attack wiping billions of dollars off the value of its Indian-based parent.

The Carmichael coal mine. Picture: Cameron Laird

Adani’s Australian arm says it’s business as usual at its coal operations in Queensland despite fraud allegations by a short seller wiping billions of dollars off the value of its Indian parent.

Bravus said Friday that there was no impact on the company’s Queensland operations or its future plans following the allegations against the global firm contained in a report by US short seller Hindenburg Research.

Hindenburg accused the Adani Group, controlled by Indian billionaire Gautam Adani, of accounting fraud and using a network of linked family companies and investment vehicles to pump up the conglomerate’s collective value.

Hindenburg’s allegations include claims one of the group’s head companies, Adani Enterprises, used asset transfers from its Australian operations to hide losses from its investors in India and avoid taking a writedown on its assets. Adani has denied the claims.

The seven companies listed in India bearing Adani’s name have now lost the equivalent of $US85bn in combined market value since Tuesday last week.

A Bravus spokesperson said its business fundamentals remained “very strong” with its Carmichael mine in central Queensland’s Galilee Basin. employing more than 1000 people.

The spokesperson said the Hindenburg report presented transactions related to Adani’s Australian businesses in a misleading way.

Gautam Adani

“This was to purposefully undermine the reputation of the Adani Group, in order to pursue their own profit by short-selling shares in Adani Group companies,” the spokesperson said.

“All our businesses are Australian companies that comply with Australian corporations and securities legislation. Our balance sheet is very healthy with strong cash flows and secure assets and we have an impeccable track record of servicing our debt.”

Bravus says the Carmichael mine has been open for around 18 months and remains fully operational. The mine employs up to 1000 people with 2,500 direct workers utilized during construction. ”In partnership with our mining services contractor MacKellar we are currently recruiting experienced operators and trades,” the spokesperson said.

“In addition to flights from Townsville and Rockhampton to the Carmichael mine we recently commenced additional flights from Mackay to cater to our growing workforce.”

Adania acquired a 99-year-lease in 2011 to the North Queensland Export Terminal (NQXT), a dedicated deep-water coal export that has been operating since 1984 servicing Queensland’s export coal industry.

Adani cancelled a share sale of up to $US2.5bn ($3.5bn) after its stock tumbled more than 25 per cent on Wednesday following the release of the Hindenberg report

“Given these extraordinary circumstances, the company’s board felt that going ahead with the issue would not be morally correct,” Adani said in a statement.

The share sale emerged as a test of Mr Adani’s ability to raise capital and fend off allegations by Hindenburg, which said the company had manipulated its share price, among other things. Mr Adani’s companies had soared in value and borrowed aggressively to fund their growth, making their ability to raise capital important for the companies’ future.