The Adani group has termed the Hindenburg Research report as not merely an “unwarranted” attack on any specific company but “a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India”.
In a 413-page response to the allegations made by Hindenburg, the group said the US firm’s conduct is “nothing short of a calculated securities fraud” and contempt for Indian regulators and judiciary.
In a point-by-point rebuttal to Hindenburg’s 88 questions, which the US firm had said didn’t get any response while it was doing its “research”, Adani said they are “simply selective regurgitations of public disclosures or rhetorical innuendos colouring rumours as fact”.
Also read: Action against Hindenburg report: Legal options open to Adani Group
Adani said 65 of the questions relate to the matters that have been duly disclosed by Adani portfolio companies in their annual reports available on their websites, offering memorandums, financial statements and stock exchange disclosures from time to time. Of the balance 23 questions, 18 relate to public shareholders and third parties (and not the Adani portfolio companies), while the balance 5 are baseless allegations based on imaginary fact patterns.
The release of the Hindenburg report, which clashed with the Rs 20,000 crore follow-on public offer (FPO) of Adani Enterprises launched a few days ago, has wiped out $47 billion of market cap in just two days of the Adani group.
The Adani response launched a scathing attack on Hindenburg by saying it 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.
Adani said it is tremendously concerning that the statements of an entity sitting thousands of miles away, “with no credibility or ethics has caused serious and unprecedented adverse impact on our investors”. The mala fide intention underlying the report is apparent given its timing when Adani Enterprises is undertaking what would be the largest ever further public offering of equity shares in India, it said.
Despite all its talks of “transparency”, Hindenburg has actively concealed the details of its short positions, the source of its own funding, who is behind them, the illegality underlying the synthetic structures by which they hold such positions, or the profit it has made by holding such positions in our securities, Adani Group said.
The response said most of the group’s businesses are profitable, sustainable, and high on compliance and governance. All key businesses subsidiaries of AEL are financially robust, profitable , regulatory complaint with strong balance sheet and none of the strategic investors have raised any concerns. It is thus confident that the follow-on public offer will sail through and Indian investors shall stay invested and grow with us.”
Also read: What is Hindenburg Research? Why is this US investor firm shorting Adani Group stocks?
“The truth of the matter is that Hindenburg is an unethical short seller. A short seller in the securities market books gain from the subsequent reduction in prices of shares. Hindenburg took “short positions” and then, to effect a downward spiral of share price and make a wrongful gain, Hindenburg published a document to manipulate and depress the price of stock, and create a false market,” Adani group said in its response.