Blasé Capital A-SQUARE ECONOMY

Despite the end of short-seller Hindenburg, which shut shop after its stock market attack on the Adani Group, the former’s shadow still looms over the latter, and the allegations hang like several Damocles swords, ever ready to slip down. Despite consistent denials, hundreds of court cases, the legal fate of Anil Ambani, once one of the uncrowned kings of business, hangs in a delicate balance, with every step inching towards his possible arrest. Recently, a foreign media report stated that an Italian bank pursued some of the charges by Hindenburg, and acted against close associates of Gautam Adani’s brother, Vinod. Anil Ambani told the Supreme Court that he would not leave the country without permission, and cooperate with the ongoing investigations led by the Enforcement Directorate, and Central Bureau of Investigation. The affidavit is related to an alleged fraud of  INR 40,000 crore.

Stock prices of both the groups have wildly fluctuated, going up and down by a few percentage points on some days, even as bad or good news enters public domain. This is despite the repeated denials issued by the Ambani Group against the several charges, and Sebi’s clean chit to the Adani Group on almost every charge mentioned by Hindenburg. Investors go back and forth, buying and selling the stocks, unsure of the future. At the same time, the two groups commit future investments. The Adani Group being much bigger offers more than the Ambani empire. These are among the rare cases, where judicial events, not just financial performances, and legalese impact the stock prices. In India, generally no one gives credence to legal cases, which are either delayed for decades, or buried under the auditor’s fine print. Sometimes, however, they become overtly important and crucial.

A couple of weeks ago, the Supreme Court lashed out at the investigating agencies for the delays in the Ambani cases. The bench led by Chief Justice Surya Kant asked ED and CBI to finish them in a time-bound manner. The ED was ordered to form a special team, and CBI was asked to furnish separate FIRs for each bank's case, rather than a single voluminous FIR. The Court urged action against erring bank officials. This was in a petition, which alleged that the investigations were narrow, incomplete, and deliberately excluded the bank officials and public servants despite evidence that indicates their complicity. The petitioner wanted a probe to cover every offence under the court’s directions. It was in this matter that Anil Ambani gave the affidavit, where he said that he had not left India since July 2025, ie, since the present case, and has no plans to do so. Yet, he would take the judicial permission, if required before he travels.

Adani is still immersed in the deluge unleashed by Hindenburg. According to recent media reports, despite the clean chit in India, from the Sebi and Supreme Court, the group is being investigated elsewhere. In the US, the market regulator, SEC, told a local court that it will issue summons to Gautam Adani, and his nephew via emails because India refuses to act officially. Adani then announced that he wanted to discuss the issues with the American regulator. Now, another report states that Italy’s largest bank met associates of Vinod Adani, and found “suspicious activities against the two, and restricted their accounts.” This was despite them rejecting the charges in a signed statement against the Hindenburg disclosures. The bank found that the two associates held $1 billion and $2 billion, respectively, in hedge funds with “underlying assets ‘likely’    invested in Adani companies. These holdings existed the day the Hindenburg report was released.

One of these associates, according to a media report, is under probe in Switzerland. This was possibly because the Italian bank found that the Dubai branch of a Swiss bank it took over had clients introduced by Vinod Adani, and his two associates. The two associates admitted that money was theirs, and clarified that the investments in Adani Group were “based on their trust in the business acumen of the members of that family.” The associates were helped to trade in the stocks by an individual who worked for Vinod Adani. Given Vinod’s plays with hundreds of millions of dollars to buy and sell Adani Group stocks, Gautam had initially distanced himself from the brother, and Vinod’s name did not appear in related-party deals in the annual reports. After the Hindenburg report, Gautam changed tracks, acknowledged Vinod as a brother, and his name appears in related-party transactions.

This is a curious case of the A-Square economy being played out in the stock markets, tax haven nations, and by little-known players. Although, in the long term, they may lead to nothing, except Anil Ambani may find himself in a spot at regular intervals, the stock prices will gyrate in volatile fashion. Some investors will always gain, as they will buy and sell at the opportune times, and others will lose out being caught in a whirlpool of confusion, uncertainty, and information gaps. For Adani, the only way out is to show results in terms of revenues, profits, and ability to complete mega projects. For Ambani, the way out seems tougher, but he needs to do it to save his fledgling empire.