Adani-Hindenburg saga continues: Fraud cannot be obfuscated by nationalism, Adani response ignores key questions, says Hindenburg

Hindenburg report an “attack on India,” claims Adani, Hindenburg hits back saying, “Adani holds back India’s future.” 

Updated - February 04, 2023 12:39 pm IST

Published - January 30, 2023 08:55 am IST - Ahmedabad

Adani Group building at Adani Shantigram near Ahmedabad. File.

Adani Group building at Adani Shantigram near Ahmedabad. File. | Photo Credit: VIJAY SONEJI

A day after the Gujarat based Adani Group in a detailed rebuttal described the US short seller’s report as a “calculated attack on India,” the Hindenburg Research on Monday hit back at Adani saying “fraud cannot be obfuscated by nationalism…”

In the latest round of ripostes, US based short seller Hindenburg and Gujarat based conglomerate Adani have accused each other of “holding back India’s future” to “calculated attack on India.”

In response to a lengthy 413 page rebuttal issued by the Adani Group on late January 29, the US short seller in an equally hard hitting rejoinder stated “Fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation we raised.”

“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.”

Editorial | Warning bells: On the Adani saga

It added, “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.”

Responding to the statements made by the Adani Group; the Hindenburg Research in its latest rejoinder said, the Group “predictably tried to lead the focus away from substantive issues and instead stoked a nationalist narrative.”

Meanwhile, top sources in the Ahmedabad based Adani Group told The Hindu that the Hindenburg report is a “hit job to derail the infrastructure projects being undertaken in last few years” in the country.

“We have never defaulted on any loan. Details about our debts and financials of the group entities are all in public domain,” a top source from the group told The Hindu, “it’s a hit job to target the infrastructure projects in India.”

The source who is in the top decision making system in the group added that the Adani entities are executing vital infrastructure projects that will help the country in rapid development.

On Sunday late night, in a detailed rebuttal, the Adani Group held that the report of the Hindenburg was “baseless” and

driven by “an ulterior motive” to “create a false market” to allow the US firm to make financial gains.

In midst of the follow on public offering of Rs 20000 crore by the group’s flagship Adani Enterprises, the conglomerate appears grappling to contain the damage as shares of its listed entities continue going down since the Hindenburg Research published the report on January 24.

In its first detailed response, the Adani Group claimed, “This is 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,” it said.

It further said the the “Hindenburg Research has conveniently ignored the Indian judiciary and regulatory framework.”

However, in a carefully worded response, the New York based short seller has contended that the report asked 88 specific questions of the Adani Group but in its response, Adani failed to specifically answer 62 of them. Instead, it mainly grouped questions together in categories and provided generalized deflections.

“Of the few questions it did answer, its responses largely confirmed our findings, as we detail,” it said.

The Hindenburg has reiterated some crucial questions regarding a sprawling network of offshore entities linked with Vinod Adani, elder brother of Gautam Adani, and dozens of transactions of those offshore entities with the listed companies of the Adani Group in India.

It added that the core allegations of their report which focused on “numerous suspect transactions with offshore entities” were not addressed by the Group in its rebuttal.

“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 U.S. dollars through Adani Group entities, largely through offshore shell entities,” the statement said.

On the follow on public offer, the Hindenburg statement said, “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.”

On Sunday, the Adani has repeated its statement that it would explore legal options.

“We will exercise our rights to pursue remedies to safeguard our stakeholders before all appropriate authorities and we reserve our rights to respond further to any of the allegations or contents of the Hindenburg report.”

Earlier, the Hindenburg had said it would “welcome” a legal suit if Adani wanted to file in the USA.

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