New Delhi, 30 January
Hindenburg Research, a short-selling firm in the US, rejected the Adani Group’s accusation that its report was an attack on India, saying the “fraud” could not be obscured by nationalism or an inflated response that neglected to respond to key allegations.
Commenting on the 413-page response released by the Adani Group late Sunday evening in response to its report, Hindenburg said she believes India is a vibrant democracy and a rising superpower with an exciting future and that it is the Adani Group that is stopping it from “systematic plunder”.
The Hindenburg stood by its report last week that said its two-year investigation concluded that the Adani Group “engaged in a brazen equity manipulation and accounting fraud scheme spanning decades.”
The reaction from the group run by Gautam Adani, Asia’s richest man, “opened with the sensational claim that we are ‘the Madoff of Manhattan,'” said Hindenburg.
It said Al-Adani alleged that they had committed a “flagrant breach of applicable securities and foreign exchange laws.” She added that “Although Al-Adani failed to identify any of these laws, this is another serious accusation that we categorically deny.”
On Sunday evening, the Adani Group likened the allegations made by the Hindenburg to a “calculated attack” on India, its institutions and its growth story, saying the allegations were “nothing but a lie”.
It said the report was motivated by an “ulterior motive” to “create a fake market” to allow the US company to make financial gains by cutting share prices. The document said the document was “a virulent mixture of selective disinformation and hidden facts relating to unsubstantiated and discredited allegations of an ulterior motive.”
“This is full of conflicts of interest and only aims to create a fake stock market to enable the Hindenburg, the recognized short seller, to make huge financial gains through illicit means at the expense of countless investors,” she said, questioning Hindenburg’s credibility and ethics.
Hindenburg responded that the Adani group “predictably tried to steer the focus away from the core issues and instead ignite a nationalist narrative”.
“The Adani Group has tried to confuse its rapid rise and the wealth of its chairman, Gautam Adani, with the success of India itself,” she said.
“We do not agree. To be clear, we believe that India is a vibrant democracy and a rising superpower with an exciting future. We also believe that India’s future is being held back by the Adani group, who have hoisted themselves with the Indian flag while systematically pillaging the nation.” Noting that “fraud is fraud even when committed by one of the wealthiest individuals in the world,” he said Adani’s 413-page response had only about 30 pages focused on issues related to the report.
“The remainder of the response consists of 330 pages of court records, along with 53 pages of high-level financial statements, public information, and details of unrelated corporate initiatives, such as how they encourage female entrepreneurship and safe vegetable production.” He said.
“Our report asked Adani’s group 88 specific questions. In its response, Adani failed to answer 62 of them specifically. Instead, it essentially grouped the questions together into categories and provided generic distractions.”
She then repeated her allegations and how the Edenian group had failed to respond to them.
The small New York short selling company’s report saw the Adani Group lose more than $50 billion in market capitalization in just two trading sessions last week and Adani himself lost over $20 billion, or about a fifth. of his total wealth.
In the report, the Hindenburg called out the group’s “significant debts”, which included pledging stock for loans; that Adani’s brother Vinod “runs a vast labyrinth of offshore shell entities” funneling billions to group companies without the required disclosure; and that its auditor “seems hardly capable of complex audit work”.
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