Adani Group Chief Financial Officer Jugeshinder Singh, in a statement on behalf of the conglomerate, said that the Hindenburg Research report, that alleged that the company engaged in stock manipulation and accounting fraud, is a “malicious combination of selective misinformation and stale, baseless and discredited allegations”. It said that report was an attempt to damage the conglomerate’s upcoming Follow-on Public Offering (FPO).
“We are shocked that Hindenburg Research has published a report on 24 January 2023 without making any attempt to contact us or verify the factual matrix. The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts,” said Singh.
“The timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming Follow-on Public Offering from Adani Enterprises, the biggest FPO ever in India. The investor community has always reposed faith in the Adani Group on the basis of detailed analysis and reports prepared by financial experts and leading national and international credit rating agencies. Our informed and knowledgeable investors are not influenced by one-sided, motivated and unsubstantiated reports with vested interests,” he said, further adding that the conglomerate is a diverse portfolio of market-leading businesses that are managed by top-notch CEOs. Singh also said that the company has always been in compliance with laws and maintains the highest levels of corporate governance.
The Hindenburg report stated that the Adani Group engaged in “accounting fraud, stock manipulation and money laundering” over the course of decades. “Adani has pulled off this gargantuan feat with the help of enablers in government and a cottage industry of international companies that facilitate these activities,” said the Hindenburg in the report based on two years of investigation, conversations with former and senior executives of the company, review of thousands of documents and site visits in multiple countries.
The report said that Gautam Adani’s brother Rajesh Adani and brother-in-law Samir Vora, who played key roles in the diamond trading import/export scheme using offshore shell entities to generate artificial turnover, are integral parts of the conglomerate. His brother Vinod Adani, found at the centre of government investigations “regularly”, manages a network of offshore entities that have collectively moved billions of dollars into Adani’s publicly listed and private entities. These companies engage in stock parking and manipulation,and money laundering through the private companies into the listed ones.
The Hindenburg report also found offshore shells allegedly sending money to public Adani companies through onshore private Adani companies.
The report also questioned the credibility and ability of Adani Enterprises’ independent audit firm Shah Dhadharia that has only four partners as young as 23-24 years old, and 11 employees.
All seven listed Adani Group stocks cracked today after the report flagged risks to the financials of its key companies. Adani Ports and Special Economic Zone tanked 5.47 per cent, Adani Transmission slipped 5.05 per cent, Adani Wilmar fell 4.61 per cent, Adani Power was down 4.55 per cent, Adani Total Gas dropped 4.38 per cent, Adani Green Energy moved 3.42 per cent lower and Adani Enterprises declined 1.56 per cent in late deals.