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Adani Enterprises up 6%, other Adani group stocks tank after Hindenburg Research says ‘fraud cannot be obfuscated by nationalism’



Shares of Adani’s group the companies were mixed on the Bombay Stock Exchange in intraday trading on Monday after the group, on Sunday evening, issued a detailed rebuttal to the Hindenburg’s study report. In his 413-page response, Gautam Adani The leading group said they were shocked and deeply worried when they read the report released by “Madoffs of Manhattan”. It added that the Hindenburg Research report was nothing but a lie.
At 10:15 am, Adani Enterprises traded up 6% at Rs 2915.59. Among the group stocks, Total Gas Adani, traded 20% off on BSE in today’s trading, while Adani Green energy fell 13%. Adani Transmission has dropped 18.8% to Rs 1634. In the past week, the stock prices of these three companies have dropped by as much as 40%. Meanwhile, Adani Power and Adani Wilmar are locked at 5% lower on BSE.
A scathing report by Hindenburg Research claims the Adani Group’s blatant accounting fraud and stock manipulation scheme led to a Dalal Street bloodbath. Short-seller Hindenburg accused Adani’s businesses of improperly using offshore tax havens and raised concerns about high debt. The report comes before the final few days of Adani Enterprises’ $2.5 billion share sale.
The Adani Group issued a detailed response on Sunday, saying it complies with all local laws and has made the necessary regulatory disclosures. The group said Hindenburg’s report, which it previously deemed unfounded, was intended to allow US-based short sellers to make a profit without presenting evidence.
While Hindenburg accused Adani’s main listed companies of having “substantial debt” that left the entire group in a “precarious financial position”, the Adani Group has repeatedly said that its loans manageable and no investor expressed concern.
So far, the report has resulted in a $48 billion loss in Adani’s stock.
In response to the Adani Group’s 413-page rebuttal to Hindenburg Research’s January 24 report, the US-based research firm on Monday said that “fraud cannot be covered up by ideological bias”. ethnicity or an ostentatious response that ignores all major accusations”. It said that the Adani group “tried to divert the focus away from substantive issues and instead spark a nationalist narrative”.
“This is not just an unwarranted attack on any particular company but a calculated attack on India, the independence, integrity and quality of Indian organisations, also like India’s growth and ambition story,” said Adani. It also said that the answers to 65 of the 88 questions outlined in the report were “already in the public domain”.
“Of the 23 balance questions, 18 concerns public and third-party shareholders (and not Adani’s portfolio companies), while balance 5 are allegations baseless based on imaginary factual patterns,” it added.
Referring to India as a vibrant democracy and a democracy with a bright future, Hindeburg’s reply went on to add that the country’s future was held back by the “Adani Group”. It reads, “In short, the Adani Group has attempted to combine its tremendous growth and the wealth of its Chairman, Gautam Adani, with the success of India itself. We disagree. Make it clear. Clearly, we believe that India is a vibrant democracy and an emerging superpower with an exciting future.We also believe that India’s future is being held back by the Adani Group, which has wearing the Indian flag while systematically looting the nation.”
“We also believe that fraud is fraud, even if it is done by one of the wealthiest individuals in the world,” it said.
The Hindenburg team stated that of Adani’s 413 pages of responses only “about 30 focused on issues related to our report.”
“The remainder of the response included 330 pages of court filings, along with 53 pages of high-level financials, general information, and details on the company’s unrelated initiatives, such as how it encourages female entrepreneurship and safe vegetable production,” it said.
The group said its report asked 88 Adani Group-specific questions, and in its response, Adani did not specifically answer 62 of them. “Instead, it essentially groups questions together by category and provides general directions.”
In other cases, Adani simply pointed to his own profile and claimed related questions or issues were resolved, again failing to resolve the issues, said the Hindenburg team. presented in a substantive manner”.
“Many of our questions focused on both the nature of these transactions and the lack of disclosure surrounding the apparent conflicts of interest involved… In response, Adani did not appear to contest the existence of a dispute. nature of these transactions and made no attempt to explain their apparent irregularities,” the response said.
The US-based short seller noted that the core allegations in their report – “focusing on multiple suspicious transactions with offshore entities – were not addressed at all.”
“We asked about the source of the billions of dollars that have flowed from offshore shell mining entities linked to Vinod Adani through the Adani Group,” said Hindenburg. Adani argued: “We don’t know. nor required to know about their ‘source of money'”
“Example #1: Loan worth ~$253 million from a Mauritian institution where Vinod Adani serves as Director” and add, “Example #2: $692.5 million investment from a Mauritian institution controlled by the head of a private company of the Adani Group The Family Investment Office”
“Our report outlines many anomalies and links between suspected overseas parking organizations and Adani promoters, raising key questions about whether or not this is the case,” Hindenburg said. whether promoter holdings are fully disclosed. Adani’s response stated that it simply does not know who its largest public holders are.”
The US company also said, “On Adani’s legal technical defense: It is clear to us that Vinod Adani is a related party of the Adani Group.”
Hindenburg concluded that, “Adani’s response largely confirmed our findings and ignored our key questions. Disclosure: We are the Adani Group shorting through Traded Bonds. in the United States and derivatives are not traded in India”
In a disclaimer, the Hindenburg team states that it holds short positions in Adani Group Companies through U.S.-traded bonds and non-traded derivatives. India, together with other non-Indian referenced securities, and the report relates only to the valuation of securities traded outside of India.
With input from the Agencies

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