A day after the U.S. short-seller Hindenburg released its research report raising serious concerns about the Adani Group’s “substantial debts”, the Ahmedabad-based conglomerate said it is evaluating the relevant provisions under the U.S. and Indian laws for remedial and punitive action against Hindenburg Research.
In a statement on January 26, the group’s legal head Jatin Jalundhwala stated that the report was an “intentional and reckless attempt by a foreign entity” and stressed that it was meant to “sabotage the FPO (Follow-on Public Offering) from Adani Enterprises.”
“The maliciously mischievous, unresearched report published by Hindenburg Research on 24 January 2023 has adversely affected the Adani Group, our shareholders, and investors. The volatility in Indian stock markets created by the report is of great concern and has led to unwanted anguish for Indian citizens.
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“We are deeply disturbed by this intentional and reckless attempt by a foreign entity to mislead the investor community and the general public, undermine the goodwill and reputation of the Adani Group and its leaders,” the statement quoted Mr. Jalundhwala as saying.
Adani stocks sink markets
On Wednesday, shares of the Adani Group’s listed companies, including its recently acquired cement and media units, fell across the board with losses ranging from 1.5% to 8% in the wake of the report that stated the company’s “substantial debt” had put the entire Group on a “precarious financial footing.”
“Today we reveal the findings of our 2-year investigation, presenting evidence that the… Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades,” Hindenburg Research said in its report published on its website on January 24.
“Our research involved speaking with dozens of individuals, including former senior executives of the Adani Group, reviewing thousands of documents” and site visits in almost half a dozen countries, the stated, adding that it had “taken a short position” on Adani group companies through U.S.-traded bonds and derivative instruments traded outside India.
‘Malicious combination of selective misinformation’: Adani Group
After the fall in its stocks, the Adani Group dismissed the report terming it a “malicious combination of selective misinformation and stale, baseless and discredited allegations.”
“The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming follow-on Public Offering from Adani Enterprises,” Group CFO Jugeshinder Singh said in a statement.
Mr. Singh emphasised that the “Group has always been in compliance with all laws, regardless of jurisdiction, and maintains the highest standards of corporate governance.”
The group’s flagship company Adani Enterprises is set to tap the market with a ₹20,000 crore follow-on public offering that opens to the public on January 27.