On Sunday, Gautam Adani’s organisation compared the negative claims put forth by short seller Hindenburg Research to a ‘planned attack:on India, its institutions, and its economic success.
After the Gautam Adani group compared the damning claims by the US short seller to a ‘planned attack’ on India, Hindenburg Research stated on Monday that fraud cannot be obscured by nationalism or a bloated reaction that ignores every significant charge we raised. The Adani Group ‘predictably tried to lead the focus away from real difficulties and instead fanned a nationalist narrative,’ said the US-based investment research firm.
The Adani Group has allegedly ‘attempted to connect its stratospheric rise and the fortune of its Chairman, Gautam Adani, with the prosperity of India itself,’ claimed a strong-worded reaction from Hindenburg Research.
‘We are at odds. To be clear, we think India is a thriving democracy and a superpower on the rise with a promising future. We also think that the Adani Group, which has swathed itself in the Indian flag while methodically robbing the country, is holding back India’s development.’
‘ We also think that fraud is fraud, even if it’s committed by one of the richest people in the world,’ the statement continued.
According to a damning research by Hindenburg Research, the ports-to-energy conglomerate lost approximately $50 billion in market value as a result of Adani Group’s blatant stock manipulation and accounting fraud plan. Adani Group said in a 413-page response that the research was motivated by ‘an ulterior goal’ to ‘create a phoney market’ in order for the US company to profit financially.
Adani Group responded that, 65 of the 88 concerns posed by Hindenburg are related to issues that Adani portfolio businesses have properly disclosed.
Of the remaining 23 questions, 18 concern public shareholders and other parties (rather than the Adani portfolio firms), and the remaining 5 are unfounded charges based on fictitious data.
Hindenburg claimed that Adani did not expressly respond to 62 of the 88 queries put forth by the company, and that when it did, it ‘mostly validated or attempted to dodge its conclusions.’
Instead, it primarily organised queries into categories and offered broad dodges, it claimed.
Other times, Adani merely cited its own documents and deemed the disputes or pertinent issues resolved, neglecting to substantively address the concerns presented.
In advance of the last several days of a $2.5 billion share sale by Adani Enterprises Ltd., which had overall subscriptions of 1% on Friday, Hindenburg responded.
The Adani Group is facing its toughest test yet, and concerns have been raised about the exposure of India’s top public sector banks and state insurer to it. Hindenburg Research has called the Adani Group’s meteoric rise ‘the largest con in corporate history.’
The Narendra Modi-led central government was the target of attacks from India’s opposition parties, who claimed that the Adani Group was heavily exposed to financial institutions including the State Bank of India (SBI) and Life Insurance Corporation of India (LIC). The vulnerability has consequences for ‘financial stability and for the crores of Indians whose investments are at risk,’ claimed the Congress general secretary Jairam Ramesh.
The banks insisted that there was nothing concerning about their exposure to Adani, claiming that it fell within the parameters set by the Reserve Bank of India. The RBI permits a bank to expose no more than 25% of its eligible available capital base to any one group of related entities.
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