The rout in the Adani Group’s shares deepens, with the conglomerate’s valuation down by about $66 billion in just three trading sessions. The Adani Group versus the Hindenburg saga continues as the allegations are thrown back and forth between the Indian conglomerate and the US-based research firm.
The standoff started with a research report by Hindenburg, which accused the Adani Group of malpractices. That led to a steep drop in Adani Group shares. Adani then issued a 413-page report on Sunday, criticising the US firm’s research, and called the report an attack on India. Then, Hindenburg retorted to Adani’s detailed response.
Hindenburg rejected the Adani Group’s report and said, “fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation we raised.”
The US firm said it believes in India’s growth story and added that the Adani group, draped in the Indian flag, is looting the country and holding back India’s progress.
Last week, Hindeburg’s report claimed that the Adani Group had links with offshore tax havens, and its exposure to high debt was a concern. The report also showed Adani Group’s stock price was inflated and had significant downside risks.
That was when the group’s flagship company Adani Enterprises launched India’s largest secondary share offering to raise $2.5 billion. While the firm’s share price rose on Monday to stall a two-day plunge, it still closed below the offer price, raising questions about its viability. The shares of other Adani firms extended their steep fall for the third straight day.
On Sunday, Adani refuted the report’s warnings about high debt levels and the usage of tax havens. Adani, in a 413-page report, asserted that it has made the required disclosures and has met with all regulations.
The Indian group called Hindenburg’s research malicious and baseless.
The US short sellers’ scathing report also alleges that Gautam Adani’s elder brother, Vinod Shantilal Shah Adani, is in charge of a maze-like network of illegal offshore shell firms.
Hindenburg alleges Vinod Adani and his close friends control Mauritius shell entities and that many entities have no signs of operations, employees, addresses, phone numbers or a meaningful online presence.
The Indian empire, in its defence, said we are neither aware nor required to be aware of their (Vinod Adani’s) ‘source of funds.
Hindenburg countered that statement and asked if they were expected to believe that Gautam Adani had no idea of funds flowing from Vinod Adani’s group or where they came from.
Hindenburg added that Gautam Adani could easily clear up the mystery by calling his brother or asking him at the next family dinner.
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