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Richest Indian Gautam Adani's group on Sunday likened the damning allegations made by short seller Hindenburg Research to a "calculated attack" on India, its institutions and growth story, saying the allegations are "nothing but a lie". In a 413-page response, Adani Group said the report was driven by "an ulterior motive" to "create a false market" to allow the US firm to make financial gains.
"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.
Stating that the allegations in Hindenburg Research's January 24 report are "nothing but a lie", it said the document is "a malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations to drive 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.
It proceeded to scrutinize the validity and morals of Hindenburg, and said the mala fide expectation basic the report were clear given its timing when Adani Endeavors Restricted is embraced one of the biggest at any point further open contribution of value partakes in India.
"Hindenburg has not published this report for any unselfish reasons but rather simply out of egotistical thought processes and in flagrant breach applicable securities and foreign exchange laws," it said. "The report is not one or the other 'free' nor 'objective' nor 'well-informed'."
Activist short dealer Hindenburg Exploration, the firm which grabbed worldwide eye with takedowns of electric-vehicle producers Nikola and Lords town Engines, claimed in a report on Wednesday that its two-year examination found the Adani Gathering "participated in a bold stock control and bookkeeping misrepresentation conspire throughout many years"
The report by the tiny New York firm that specializes in short selling has led to Adani group losing more than USD 50 billion in market value in just two trading sessions and Adani himself losing in excess of USD 20 billion, or about one-fifth of his total fortune.
Hindenburg called out the conglomerate's "substantial debt", which includes pledging shares for loans; that Adani's brother Vinod "manages a vast labyrinth of offshore shell entities" that move billions into group companies without required disclosure; and that its auditor "hardly seems capable of complex audit work".
Of the 88 questions raised by Hindenburg, 65 of them relate to matters that have been duly disclosed by Adani portfolio companies, Adani Group said. "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 listed questions from the report and dismissed them as "false suggestions based on malicious misrepresentation of governance practices" or "manipulated narrative around unrelated third party entities" or "biased and unsubstantiated rhetoric".
"We reaffirm that we are in compliance with all applicable laws and regulations. We are committed to the highest levels of governance to protect the interests of all our stakeholders," it said. "The Adani Portfolio also has very strong internal controls and audit controls. All the listed companies of Adani Portfolio have a robust governance framework."
The focus of the Adani portfolio and the Adani verticals is to contribute to nation building and take India to the world, it said.
"We will exercise our rights to pursue remedies to safeguard our stakeholders before all appropriate authorities and we reserve our rights to respond further to any of the allegations or contents of the Hindenburg report or to supplement this statement," it added.
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