Adani Group says evaluating taking action against Hindenburg Research

Hindenburg accused the Adani Group of pulling 'the largest con in corporate history'

The Adani Group is exploring legal action against US-based Hindenburg Research that recently accused the ports-to-power conglomerate of stock manipulation and accounting fraud.

“We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research,” Adani Group’s legal head, Jatin Jalundhwala, said in an exchange filing on Thursday.

The move came a day after shares in the conglomerate’s companies lost about Rs 97,000 crore in market value following the release of the US investment research firm’s report accusing billionaire Gautam Adani’s group of pulling “the largest con in corporate history”.

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Hindenburg also said it was shorting the stocks of the Adani group companies. Shorting a stock is a bet that the share price will fall.

India’s benchmark indices fell to their lowest level in over a week on Wednesday due to the drop in the Adani group stocks.The Nifty 50 index closed 1.25 per cent lower at 17,891.95, while the S&P BSE Sensex fell 1.27 per cent to close at 60,205.06.

“The volatility in Indian stock markets created by the report is of great concern and has led to unwanted anguish for Indian citizens,” Jalundhwala said.

Hindenburg’s report highlighted and questioned Adani’s family-controlled offshore shell entities in tax havens such as Mauritius, the United Arab Emirates and the Caribbean, the substantial debt leverage in most of its companies and the basis of sky-high valuations. It claimed that these were used to facilitate corruption, money laundering and taxpayer theft, while syphoning money from the group’s listed firms.

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The report came ahead of the opening of a key share sale worth about Rs 20,000 crore by Adani Enterprises.

The Adani group said the report was “maliciously mischievous” and “unresearched”, and questioned its timing.

“Clearly, the report and its unsubstantiated contents were designed to have a deleterious effect on the share values of Adani Group companies as Hindenburg Research, by their own admission, is positioned to benefit from a slide in Adani shares,” the company said.