Adani hits back at Hindenburg, saying he made all the revelations

  • Adani issued a 413-page rebuttal to the Hindenburg report
  • The US short sellers report sent Adani shares lower
  • Adani says it complies with laws, required disclosures
  • Adani’s CFO is confident the $2.5 billion share sale will succeed

NEW DELHI, Jan 30 (Reuters) – India’s Adani Group issued a detailed response on Sunday to the Hindenburg Research report that sent its $48 billion stock plunging, saying it complied with all local laws and made the necessary regulatory disclosures.

The conglomerate, led by Asia’s richest man, Indian billionaire Gautam Adani, said last week’s Hindenburg report was intended to allow the US-based short seller to book profits without citing evidence.

For Adani, 60, the stock market crash was a dramatic setback for a school dropout who quickly rose in recent years to become the world’s third-richest person before falling last week to seventh on the Forbes rich list.

Adani Group’s response comes as its flagship Adani Enterprises ( ADEL.NS ) moves ahead with a $2.5 billion share sale. This was overshadowed by the Hindenburg Report, which noted concerns about debt levels and the use of tax havens.

“All transactions entered into by us with entities that 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.

“It is fraught with conflict of interest and is only intended to create a false securities market to enable Hindenburg, an admitted short seller, to register huge financial gain through illicit means at the expense of countless investors,” it added .

Hindenburg did not immediately respond to a request for comment on Adani’s response on Sunday.

His report questioned how the Adani Group used offshore entities in tax havens such as Mauritius and the Caribbean islands, adding that certain offshore funds and shell companies “secretly” held shares in Adani’s listed companies.

The research report, Adani said, made “misleading claims about offshore entities” without any evidence.

Adani said on Thursday it was considering action against the Hindenburg, which responded the same day by saying it would welcome such a move.

The Hindenburg report also said five of the seven key Adani listed companies reported current ratios, a measure of liquid assets minus short-term liabilities, below 1, which it said suggested “increased short-term liquidity risk”.

It said key Adani-listed companies had “significant debt” which had put the entire group on “uncertain financial footing” and that shares in seven Adani-listed companies were down 85% due to what it called ” sky high marks’.

Adani’s response said its group companies had “consistently deleveraged” over the past decade.

Defending its practice of pledging stakes to its promoters – or key shareholders – Adani Group said raising finance against shares as collateral is a common practice globally and loans are given by major institutions and banks based on thorough credit analysis.

The group added that a robust disclosure system has been put in place in India and its promoter holdings in portfolio companies have fallen from more than 50% in March 2020 in some listed stocks to less than 20% in December 2022. .


The Hindenburg Report and its fallout are seen as one of the biggest career challenges to face the billionaire, whose business interests range from ports, airports, mining and energy to media and cement.

Adani’s response includes more than 350 pages of appendices that include excerpts from annual reports, public disclosures and previous court decisions.

Hindenburg, Adani said, sought answers to 88 questions in its report, but 65 of those were related to issues disclosed by Adani’s portfolio companies in annual reports.

The rest, Adani said, related to public shareholders and third parties, and some were “baseless claims based on imaginary fact patterns.”

Hindenburg, known for shorting electric truck maker Nikola Corp ( NKLA.O ) and Twitter, said it held short positions in Adani companies through U.S.-traded bonds and non-Indian-traded derivatives.

Adani also responded to Hindenburg’s allegations related to the company’s auditors, saying “all those auditors who have been engaged by us are duly certified and qualified by the relevant statutory authorities.”

His response comes just hours before the market opens in India, when a secondary sale of $2.5 billion worth of shares begins its second day of subscription. Friday’s crash pushed Adani Enterprises shares below their issue price, raising doubts about their success.

In a separate statement on Sunday, Adani Group Chief Financial Officer Jugeshinder Singh said the company is focused on the share sale and is confident it will succeed. He also said major investors have shown faith and remain invested.

“We are confident that the FPO (subsequent public offering) will also go through,” he said.

Reporting by Aditya Kalra, Aditi Shah, Jayshree Upadhyay and Anirudh Saligrama in Bengaluru; Editing by Kevin Liffey and Alexander Smith

Our standards: The Thomson Reuters Trust Principles.

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