Adani Group receives criticism from Hindenburg Research
Adani Group's claim that its study was an assault on India has been denied by US short seller Hindenburg Research, which claims that a "fraud" cannot be obscured by nationalism or a bloated response that missed answer to crucial concerns.
Hindenburg commented on the 413-page statement Adani Group produced late on Sunday night in response to its research, saying it thought India was a thriving democracy and a developing powerhouse with a promising future and that Adani Group was holding it back by "systematic plunder."
The two-year investigation conducted by Hindenburg revealed that Adani Group had "engaged in a blatant stock manipulation and accounting fraud scheme over the course of decades," according to the report released last week.
The group led by Asia's wealthiest man, Gautam Adani, "started with the sensationalistic allegation that we are the 'Madoffs of Manhattan,'" according to Hindenburg, in its response. We have allegedly broken "relevant securities and foreign currency regulations flagrantly," according to Adani. The statement said, "This is another severe charge that we completely dispute, notwithstanding Adani's inability to name any such legislation."
Adani Group has compared Hindenburg's damaging accusations to a "planned assault" on India, its institutions, and its development narrative on Sunday evening, claiming the accusations are "nothing but a falsehood."
It said that the article was motivated by "an ulterior motivation" in order to "create a phony market" that would enable the US company to profit by bringing down stock prices. In order to further an ulterior objective, the paper contains "a vicious mix of selected falsehoods and suppressed facts linked to spurious and discredited claims." It had said, casting doubt on Hindenburg's credibility and ethics, that "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 improper means at the cost of countless investors."
The Adani Group "predictably sought to move the emphasis away from fundamental concerns and instead created a nationalist narrative," said Hindenburg in response. Adani Group has made an effort to equate the prosperity of India with its own stratospheric growth and Gautam Adani's fortune, the statement said.
"We are at odds. To be clear, we think India is a thriving democracy and a powerhouse on the rise with a promising future. We also think that the Adani Group, which has swathed itself in the Indian flag while ruthlessly plundering the country, is holding back India's future." It said that Adani's '413-page' response only had roughly 30 pages that were specifically focused on topics connected to the study, stating that a "fraud remains a fraud even when it's done by one of the richest persons in the world."
The remaining portion of the response, according to the statement, "consisted of 330 pages of court documents, 53 pages of high-level financial information, general data, and details on irrelevant corporate initiatives, such as how it promotes female entrepreneurship and the production of safe vegetables."
"In our study, we questioned Adani Group on 88 specific issues. Adani did not precisely address 62 of them in its response. Instead, it largely gave generic deflections and groupings of problems." It continued by restating its accusations and the fact that Adani Group had not addressed them.
In only two trading sessions last week, the small New York business that specializes in short selling's report caused the Adani Group to lose more over USD 50 billion in market value, and Adani himself lost more than USD 20 billion, or almost one-fifth of his entire wealth.
In the report, Hindenburg criticized the conglomerate's "substantial debt," which includes pledging shares for loans, Vinod Adani's "management of a vast labyrinth of offshore shell entities," which move billions into group companies without having to disclose them, and the auditor, who "hardly seems capable of complex audit work."