Inside story of Operation Zeppelin
In Jan 2023, Hindenburg published a scathing report describing Adani Group; It resulted in evaporating of $150-bn mcap for the Indian conglomerate; Back home, Adani worked overtime to claw back the narrative by trimming debt through prepayments and repayments of borrowing and refocusing attention on the group’s core businesses
New Delhi: Hindenburg Research, the forensic financial firm that challenged the Adani Group, took its name from the infamous airship that burst into flames upon arriving in New Jersey in 1937. And the counter to its damning report against the conglomerate was dubbed ‘Operation Zeppelin,’ named after the German dirigible airships used for reconnaissance and bombing during the First World War. In January 2023, Hindenburg published a scathing report describing the Adani Group, one of India’s largest conglomerates, led by one of its richest men, as “the largest con in corporate history”.
The fallout was swift: stock prices plummeted, wiping out over $150 billion in market value at the lowest point, and the group’s biggest public offering was abruptly scrapped. For a moment, it seemed like Gautam Adani’s empire was on the brink. But that impression didn’t last long. The group staged a swift comeback, deploying a mix of public relations, legal maneuvers, and strategic tactics to counter the fallout and restore investor confidence. The comeback was bolstered by a covert operation, believed to have involved assistance from an Israeli intelligence agency, according to people briefed on the issue.
The Hindenburg report, which accused the Adani Group of stock manipulation and accounting fraud, dropped just a week before Gautam Adani was in Israel to finalise a $1.2-billion deal to acquire the Haifa seaport. The privatisation of Haifa Port was Israel’s largest and most ambitious infrastructure and financial undertaking of the 2020s.
Initially, 18 international bidders expressed interest, but only five were cleared to submit final proposals.
The winning bid -- after passing Israel’s stringent security vetting -- came from a joint venture between Gadot Masofim for Chemicals Ltd and Adani Ports and Special Economic Zone Ltd, with the Indian firm holding the majority stake.
The bids, evaluations, and clearances had taken 18 long months -- and Israeli Prime Minister Benjamin Netanyahu was present at the signing on January 31, 2023. As the Hindenburg report dominated global headlines, a private conversation unfolded in a modest room at the Haifa port. According to sources, a top Israeli leader questioned Adani about the allegations, to which the Indian billionaire firmly responded that they were ‘absolute lies’. Eshel Armoni -- the outgoing chairman of the port and a former high-ranking Mossad official -- was believed to have been present during the exchange. Some within the Israeli establishment viewed the Hindenburg report as a deliberate attempt to undermine the Haifa port deal, which Tel Aviv considered strategically vital for the India-Middle East-Europe Economic Corridor -- a counterweight to growing Chinese influence in the region.
