Days after Hindenburg Research accused the Adani Group of stock manipulation and use of tax havens, the latter slammed the US-based investment research firm with a 413-page response on Sunday (January 29).
The Indian conglomerate suffered a loss of $48 billion in stock markets after Hindenburg Research published its 32,000-word report.
While highlighting its compliance with local laws, Adani Group said, “All transactions entered into by us with entities who qualify as ‘related parties’ under Indian laws and we have duly disclosed accounting standards.
So Adani has just released a 413 page statement in response to Hindenburg allegations pic.twitter.com/uV2U1KreT8
— Chandra R. Srikanth (@chandrarsrikant) January 29, 2023
It pointed out how the US-based investment research firm sought to benefit from its damning report.
“This is rife with conflict of interest and intended only to create a false market in securities to enable Hindenburg, an admitted short seller, to book massive financial gain through wrongful means at the cost of countless investors,” the Adani group emphasised.
The Indian conglomerate also dismissed the misleading claims that Hindenburg Research made about its offshore entities, without furnishing any credible evidence.
Gist of Adani response to Hindenburg pic.twitter.com/u2VoXOkUQX
— Chandra R. Srikanth (@chandrarsrikant) January 29, 2023
Following credit analysis, it further defended its decision to pledge shares of its group companies, owned by promoters and key shareholders, to secure loans as a globally accepted practice.
“It is tremendously concerning that the statements of an entity sitting thousands of miles away, with no credibility or ethics has caused serious and unprecedented adverse impact on our investors,” it further added.
In its 413-page report, the Adani Group included snippets from its annual reports, court verdicts and public disclosures. The Indian conglomerate also responded to the 88 questions raised by Hindenburg Research to cast aspersions on its credibility.
So Adani says the Hindenberg report is not targeted a company but is “an attack on India, the independence, integrity and quality of Indian institutions” 👁 pic.twitter.com/DiE7FzQn9p
— Chandra R. Srikanth (@chandrarsrikant) January 29, 2023
Interestingly, 65 of the questions pertaining to the Adani Group were disclosed by the conglomerate in its previous annual reports.
“Of the balance 23 questions, 18 relate to public shareholders and third parties (and not the Adani portfolio companies), while the balance 5 are baseless allegations based on imaginary fact patterns,” it added.
“Not one of these 88 questions is based on independent or journalistic fact finding. They are simply selective regurgitations of public disclosures or rhetorical innuendos colouring rumours as fact,” the Adani Group further emphasised.
Link to full Adani response https://t.co/ugkMxwYgs9
— Chandra R. Srikanth (@chandrarsrikant) January 29, 2023
The Adani group also exposed the three-step ‘modus operandi’ of Hindenburg Research.
“Selective and manipulative presentation of matters already in the public domain to create a false narrative, Complete ignorance or deliberate disregard of the applicable legal and accounting standards as well as industry practice, contempt for the Indian institutions including the regulators and the judiciary,” it said.
The Indian conglomerate also questioned the credibility of the US-based investment research firm and its tall claims.
“Ironically for an organization that seeks transparency and openness, nothing much is known about either Hindenburg or its employees or its investors. Its website alleges that the organisation has an experience that “spans decades” and yet appears to have been set up only in 2017,” it pointed out.
Adani Group dismisses Hindenburg research report as a calculated attack on India
The Adani Group noted, “The mala fide intention underlying the report is apparent given its timing when Adani Enterprises Limited is undertaking what would be the largest ever further public offering of equity shares in India.”
This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” it concluded.
Earlier on January 25, the Adani Group trashed the Hindenburg Research report as a ‘malicious combination of selective misinformation and stale, baseless and discredited allegations. It had also come under attack from the Indian National Congress, which accused the Indian conglomerate of crony capitalism.
Hindenburg stands by its report, hit back on Adani
Hindenburg Research, in the meanwhile, has stood by its report and stated, “Fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation we raised.”
It has stated that contrary to Adani’s claim, they believe that India is a vibrant democracy with an exciting future and companies like Adani are holding India back. It added that Adani’s 413-page rebuttal has only 30 pages that focus on the issues raised and added that Adani has failed to answer 67 of the 88 questions raised by them. The complete response can be read here.
