Adani Group says allegations made in Hindenburg report 'stale and baseless'

Hindenburg Research said that it was shorting Adani group's stocks and accused the firms of 'brazen' market manipulation and accounting fraud

Adani Group on Wednesday said that the Hindenburg Research report was released on January 24 without making any attempt to contact them or verify the facts. It added that the allegations made have already been rejected by the "highest courts" in India. 

"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. 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," Jugeshinder Singh, Group CFO at the Adani Group said.  

Hindenburg, a US-based investment research firm that specialises in activist short-selling, on Tuesday made wide-ranging allegations of corporate malpractice following a two-year investigation into Adani's companies. It said that it was shorting the group's stocks and accused the firms of "brazen" market manipulation and accounting fraud.

According to Bloomberg, the report details "a web of Adani-family controlled offshore shell entities in tax havens, from the Caribbean, Mauritius and the United Arab Emirates, that it claims were used to facilitate corruption, money laundering and taxpayer theft, while siphoning money from the group's listed companies".

The shares of Adani Enterprises, the group's flagship firm, fell 4 per cent on Wednesday after the report came out. The shares of Ambuja Cements crakced 9 per cent before recovering. 

The group is also planning a $2.5 billion FPO, one of the biggest ever in India. 

"Our informed and knowledgeable investors are not influenced by one-sided, motivated and unsubstantiated reports with vested interests. The Adani Group, which is India’s leader in infrastructure and job creation, is a diverse portfolio of market-leading businesses managed by CEOs of the highest professional calibre and overseen by experts in various fields for several decades. The Group has always been in compliance with all laws, regardless of jurisdiction, and maintains the highest standards of corporate governance," Singh said.