New Delhi: 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 went on to question the credibility
and ethics of Hindenburg, and said the mala fide intention underlying
the report were apparent given its timing when Adani Enterprises
Limited is undertaking one of the largest ever further public
offering of equity shares in India.
“Hindenburg has not published this
report for any altruistic reasons but purely out of selfish motives
and in flagrant breach of applicable securities and foreign exchange
laws,” it said. “The report is neither ‘independent’ nor
‘objective’ nor ‘well researched’.”
Activist short seller Hindenburg
Research, the firm which caught global attention with takedowns of
electric-vehicle makers Nikola and Lordstown Motors, alleged in a
report on Wednesday that its two-year investigation found the Adani
Group “engaged in a brazen stock manipulation and accounting
fraud scheme over the course of decades”.
The report by the tiny New York firm
that specialises 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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