The battle of allegations and counter-allegations between the Adani Group and US-based short seller Hindenburg Research continued on Monday, with the latter issuing another statement countering the 413-page rejoinder by the former. In less than 10 hours after the rejoinder, Hindenburg Research countered that fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation raised by it.
“Of the questions Adani answered, they largely confirmed our findings, argued points we didn’t raise or sidestepped the key issues altogether,” Hindenburg Research said.
The US-based company claimed that the Indian conglomerate failed to answer 62 of the 88 ‘specific questions’ it posted in the report. It also alleged that the Adani Group provided ‘generalised deflections’ and grouped questions together in categories.
The Adani Group had termed the Hindenburg’s response not merely an ‘unwarranted’ attack on any specific company but a “calculated attack” on India, its institutions and growth story, and that the allegations are “nothing but a lie”.
“The Adani Group has attempted to conflate its meteoric rise and the wealth of its chairman Gautam Adani with the success of India itself. We disagree. To be clear, we believe India is a vibrant democracy and an emerging superpower with an exciting future. We also believe India’s future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation,” the research company said.
The response by Adani Group late on Sunday night did have an effect on a few of the company’s stocks. Two of Adani Group’s stocks traded in the green on the BSE. Two others hit the lower circuit and three others were in the red. Adani Enterprises, the flagship of the group which is in the middle of a share-sale programme, saw its stock hit a high of 10% compared to its previous day’s close.
The research firm stated that it presented extensive evidence that Vinod Adani’s (brother to chairman Gautam Adani) offshore shell entities have been used for stock parking/stock manipulation or engineering Adani’s accounting.
“Adani did not seem to dispute the existence of these transactions and made no effort to explain their obvious irregularities. Instead, Adani bizarrely argued that Vinod Adani is not a related party to the Adani Group, and that there are no disclosable conflicts relating to the transactions that have collectively moved billions of US dollars through Adani Group entities, largely through offshore shell entities,” the research firm said.
Hindenburg Research added that the ₹20,000-crore FPO of Adani Enterprises contains several of the Mauritius funds related to Vinod Adani. “We also note that the recent follow-on public offer (FPO) in Adani Enterprises contains many of the same type of Mauritius funds that we pointed out as likely being in clear violation of SEBI regulations,” Hindenburg Research said.