NEW DELHI: India’s Adani Group issued a detailed response on Sunday (Jan 29) to a Hindenburg Research report that sparked a US$48 billion rout in its stocks, saying it complies with all local laws and had made the necessary regulatory disclosures.
The conglomerate led by Asia’s richest man, the Indian billionaire Gautam Adani, said last week’s Hindenburg report was intended to enable the US-based short seller to book gains, without citing evidence.
For 60-year-old Adani, the stock market meltdown has been a dramatic setback for a school-dropout who rose swiftly in recent years to become the world’s third richest man, before slipping last week to rank seventh on the Forbes rich list.
Adani Group’s response comes as its flagship company, Adani Enterprises, pushes ahead with a US$2.5 billion share sale. This has been overshadowed by Hindenburg’s report, which flagged concerns about debt levels and the use of tax havens.
“All transactions entered into by us with entities who qualify as ‘related parties’ under Indian laws and accounting standards have been duly disclosed by us,” Adani said in the 413-page response issued late on Sunday.
“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 added.
Hindenburg said on its website Adani’s “response largely confirmed our findings and ignored our key questions.” It reiterated that it was short on the Adani group through US traded bonds and non-Indian-traded derivative instruments.
Its report had questioned how the Adani Group has used offshore entities in tax havens such as Mauritius and the Caribbean islands, adding that certain offshore funds and shell companies “surreptitiously” own stock in Adani’s listed firms.
The research report, Adani said, made “misleading claims around offshore entities” without any evidence whatsoever.
Hindenburg said it “found Adani’s lack of direct and transparent answers” on the allegations of use of offshore entities “telling”.
Adani said on Thursday that it is considering taking action against Hindenburg, which responded on the same day by saying it would welcome such a move.