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Adani Group slams US short seller Hindenburg over fraud allegations


New Delhi

Adani Group has published a detailed rebuttal running to more than 400 pages against allegations of fraud made by a US investment firm, calling the short seller’s investigation of the ports-to-power conglomerate “a calculated attack on India.”

Hindenburg Research released a report on billionaire Gautam Adani’s business last week, accusing it of “brazen stock manipulation and accounting fraud scheme over the course of decades.” It said it had taken a short position in the Adani Group’s companies, meaning it would benefit from a drop in their value.

Since the release of Hindenburg’s report, Adani’s business empire has lost more than $70 billion of its stock market value. The infrastructure tycoon’s net worth has also plummeted by some $30 billion, according to the Bloomberg Billionaires Index.

He is still Asia’s richest man with a personal fortune worth over $92 billion, which is $10 billion more than fellow Indian entrepreneur Mukesh Ambani.

In its long and angry response published on Sunday, the Adani Group called Hindenburg’s allegations “baseless and discredited” and said the research firm had an “ulterior motive.”

“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,” it said.

The 60-year-old tycoon founded the Adani Group over 30 years ago, and is seen as a close ally of India’s current prime minister, Narendra Modi.

Before the rout, which continued on the Mumbai stock exchange on Monday, markets had been cheering for the businessman and his breathless pace of expansion. Investors were betting on the self-made industrialist’s ability to grow his businesses in sectors that Modi had prioritized for development.

In its response, the Adani Group portrayed the US short seller’s report as an “attack” on India and its investors.

“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 said.

Hidenburg had concluded its report last week with 88 questions for the Adani Group. These ranged from asking for details on the group’s offshore entities, to why it has “such a convoluted, interlinked corporate structure.”

The Indian conglomerate called those questions “rhetorical innuendos coloring rumors as fact.” It then sought to answer them, and published some tables and charts to support its position.

The long rebuttal sought to reassure investors about the group’s debt, banking relationships and corporate governance practices. Most Adani stocks fell Monday in Mumbai. However, Adani Enterprises, the group’s flagship company, was up over 4%.

Hindenburg’s claims come at a sensitive time. Adani Enterprises is aiming to raise 200 billion rupees ($2.5 billion) by issuing new shares this month. The offer will close on Tuesday.

Hindenburg responded to Adani’s rebuttal by saying “fraud cannot be obfuscated by nationalism.”

“Adani Group has attempted to conflate its meteoric rise and the wealth of its Chairman, Gautam Adani, with the success of India itself,” it said in a post on Twitter on Sunday.

Hindenburg went on to add that the group has ignored “every key allegation we raised.”

“In terms of substance, Adani’s 413 page response only included about 30 pages focused on issues related to our report,” it said.

“The remainder of the response consisted of 330 pages of court records, along with 53 pages of high-level financials, general information, and details on irrelevant corporate initiatives, such as how it encourages female entrepreneurship and the production of safe vegetables.”


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