The richest man in Asia’s country, India’s Adani Group, has retaliated against a study by American short-seller Hindenburg Research, calling it “malicious,” “baseless,” and chock-full of “selected falsehoods.”
Since Hindenburg released its report claiming fraud and other wrongdoing, shares in the conglomerate have experienced significant losses. While shares in other Adani listed firms declined between 5% and 20% on Monday during trading, the company’s Adani Enterprises increased by 4.8%.
Hindenburg was charged with undermining India and its institutions, breaching securities and foreign exchange regulations, and other offences in Adani’s 400-page reply, which was released late on Sunday. Adani has also charged Hindenburg with attempting to thwart a share sale that was once projected to generate approximately $2.5 billion in revenue and for which it claimed to be betting against the group’s enterprises.
According to Adani’s statement, the independence, integrity, and excellence of Indian institutions, as well as India’s growth story and aspirations, were all targets of this deliberate attack.
Hindenburg refuted the claims and asserted that Adani’s answer mostly verified its conclusions but omitted to address important issues. It said that the group was attempting to equate its achievements with those of India as a whole.
“In our opinion, India is a thriving democracy and a superpower on the rise with a promising future.” “We also think that the Adani Group is holding back India’s future,” said Hindenburg in a statement. We also think that fraud is fraud, even if it’s committed by one of the richest people on earth.
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Mining coal to support India’s rapidly expanding economy has made Gautam Adani and his family extremely wealthy. Infrastructure, ports, data transmission, media, renewable energy, defence manufacturing, and agribusiness are among the conglomerate’s businesses. Adani’s personal wealth has increased by around 2000% in recent years.
According to Bloomberg’s Billionaire Index, his net worth climbed close to $125 billion before the end of last year, surpassing Amazon CEO Jeff Bezos for a brief period to place him as the second-richest person in the world. After last week’s losses, the Bloomberg index ranked him seventh in the world, with a net worth of $92.7 billion.
According to the Hindenburg research, due to their exorbitant values, the seven major Adani listed companies have an “85% downside, just on a fundamental basis.”
According to Hindenburg, a two-year investigation led to the publication of its study, “Adani Group: How the World’s Third Richest Man is Pulling the Largest Con in Corporate History.” It included 88 questions that the business was asked to respond to. Concerns about the group’s debt levels, the actions of its top executives, the use of offshore shell firms, and earlier fraud investigations constituted the majority of the claims.
On Wednesday, investors started selling shares connected to Adani, erasing over $48 billion in market value.
Despite the value of its shares falling significantly below the price range of the offering, Adani announced over the weekend that it will proceed with the sale of shares in Adani Enterprises as planned. Adani Enterprises was trading at 2,892.85 rupees ($35.50) on Monday, up 4.8% but still much below the initial price range of 3,112 to 3,276 rupees established for the Tuesday closing of the offering.
The Adani Group claimed that none of the 88 questions were “based on independent or journalistic fact-finding” in their response to Hindenburg. Numerous queries were disregarded as being unfounded, deceptive, or biassed. The group provided documentation and data tables in answer to additional inquiries and claimed to have complied with local legislation.
The “leverage ratios of Adani portfolio firms continue to be healthy and are in line with the industry benchmarks of the respective industries,” according to Adani, which rejects worries about its debt-fueled growth.
Jugeshinder Singh, the chief financial officer of Adani, stated that the group’s total debt was $30 billion, of which $9 billion was owed to Indian banks, in an interview with CNBC TV-18 on Monday.
Only 30 pages of Adani’s response, according to Hindenburg, were devoted to the problems it addressed; the remainder were made up of court documents, general data, business financials, and “irrelevant corporate objectives.” It claimed that Adani had not directly responded to 62 of the 88 queries it had addressed.
Late on Thursday, Jatin Jalundhwala, the director of the Adani group’s legal division, declared that the company was thinking about suing Hindenburg. According to Hindenburg, the Adani group’s legal action would be welcomed, and the company stood by its report.
