The Adani Group’s 413-page defence of its claims of stock manipulation and use of tax havens was criticised by The Hindenburg Research on January 30 as a “effort to obfuscate by nationalism” in a study that also raised debt concerns.
Despite several connections, the US-based short seller said that “The Adani Group has not even sought to define its relationship with a Chinese National (Chang Chung-Ling).”
In its most recent statement, Hindenburg Research claimed that the Adani Group had not responded to inquiries made in its initial report, specifically one regarding the nature of the bond between Vinod Adani, Gautam Adani’s older brother, and Chang Chung-Ling, as well as the group’s connection to the Chinese national.
It claimed that one case in its research demonstrated how a party connected to Adani made a significant investment in one of the questionable offshore holders, “creating a direct line between the Adani Group and the suspected stock parking firms.”
“We also demonstrated how Amicorp, which was associated with the 1MDB crisis, one of the most infamous international fraud and money laundering scandals in history, had assisted in the formation of a number of the suspicious stock parking businesses. We further point out that many of the Mauritius funds present in the current Follow On Public Offer (FPO) in Adani Enterprises are the same ones we identified as possibly being in flagrant violation of SEBI regulations “The claim was made.
Ayushmat Limited, Coeus Global Opportunities Fund, Great International Tusker Fund, and Aviator Global Investment are just a few of the suspect Mauritius funds listed as examples in the article, which also claims that the anchor list of Adani Enterprises investors “contains a host of suspect Mauritius funds.”
The 413-page reply from Adani Group was released as its flagship firm, Adani Enterprises, moved forward with a $2.5 billion share sale. Hindenburg’s report, which raised issues with debt levels and the usage of tax havens, has eclipsed this.
It continued, “This is fraught with conflict of interest and meant simply to establish a phoney market in securities to allow Hindenburg, an admitted short seller, to earn significant financial gain through improper tactics at the expense of several investors.
Adani responded, saying, “This is not just an unwarranted attack on any particular firm, but a premeditated attack on India, the independence, integrity, and excellence of Indian institutions, as well as the growth story and aspiration of India.
Between January 23 and January 27, Adani Enterprises’ share price fell by 20% as a result of the Hindenburg report.
After Adani Group Chief Financial Officer Jugeshinder Singh rejected claims made by Hindenburg Research and stated that the follow-on public offer (FPO) of flagship Adani Enterprises will proceed as planned, the stock seemed to have gained some foothold.
Adani Enterprises’ stock increased 10% on January 30. It was trading at Rs 2,966.30 at 9.43 am, up Rs 204.15 or 7.39 percent. It reached a high of Rs 3,038.35 and a low of Rs 2,771.05 throughout the day.
Singh criticised the Hindenburg report, calling it a willful fabrication of the truth, and said that the US short-seller purposefully exploited only a portion of the group’s disclosures to make false assertions.
On January 25, Hindenburg Research announced that it was holding short positions in the Adani Group companies using derivatives traded outside of India and US-listed bonds.
One of the largest professional obstacles facing billionaire Gautam Adani, whose businesses include ports, airports, mining, and power as well as media and cement, is the report and its repercussions. It caused a collapse in the stock prices of all Adani Group-affiliated businesses and tightened regulatory oversight of them.
