When Hindenburg answers, Adani counters: What is said in their back-and-forth discussion?

When Hindenburg answers, Adani counters: What is said in their back-and-forth discussion?

Who is Adani? According to Hindenburg, the Adani Group is still the subject of its ongoing due diligence, why? What the two have so far accused one another of is listed below.


The explosive Hindenburg report, which charged the conglomerate with “brazen stock manipulation and accounting fraud scheme over the course of decades,” was addressed by Adani Group on January 29. The report is not just an “unwarranted attack on any specific company, but a calculated attack on India, the independence, integrity, and quality of Indian institutions, as well as the growth story and ambition of India,” according to Adani’s response, which also questions Hindenburg’s credentials and the timing of the report.

The Adani Group lost more than USD 50 billion in market value in just two trading days after the January 24 report from Hindenburg Research was released, with Chairman Gautam Adani losing more than USD 20 billion, or almost one-fifth of his total wealth.


Who is Adani?

The Adani Group was established more than 30 years ago by 60-year-old businessman Gautam Adani, who has built it into India’s largest port operator with companies in infrastructure and energy generation. He overtook Jeff Bezos to briefly become the second-richest person in the world a year ago when he became the richest person in India.



The initial charges were that it was the “biggest con ever.”

A report titled “Adani Group – How the World’s Third Richest Man Is Pulling the Biggest Scam in Business History” was published on January 24 (January 25 in India) by Hindenburg Research, based in New York. In the report, it was stated that a “2-year investigation” had revealed “proof that the Indian giant Adani Group, worth INR 17.8 trillion (U.S. $218 billion), has participated in a blatant stock manipulation and accounting fraud scheme over the course of decades.”

The study asserted to have proof of numerous financial violations at Adani, including exaggerated stock valuations and exorbitant debt. It claimed that the Adani family was “managing the group’s money and critical decisions” and that the conglomerate was being operated in an unprofessional manner, much like “a family business.” The report further charged the conglomerate with running numerous offshore shell companies for “a variety of purposes, including stock parking and manipulation and money laundering through Adani’s private companies onto the balance sheets of the listed companies in order to maintain the appearance of financial health and solvency.”


The reply from Adani was, “Attack on India’s growth story.”

Jugeshinder Singh, the group’s chief financial officer, denounced the report as a “malicious combination of selected falsehoods and stale, unsubstantiated, and debunked charges” almost immediately as Adani Group stocks plummeted. In a 413-page rejoinder published on January 29, Adani compared the Hindenburg report to a “planned attack on India,” its institutions, and the country’s “development story.” The following themes dominated the answer.

Doubting Hindenburg’s drive

Adani’s response called Hindenburg’s report “nothing but a fraud” and questioned Hindenburg’s intent. According to the statement, Hindenburg produced the report with the “admitted goal of profiteering at the expense of our shareholders and public investors.” It said that Hindenburg was a “unethical short seller” who tried to “cause a decline in the share price of (Adani’s)” and “make an erroneous gain.” Additionally, it charged Hindenburg with hiding important facts, including “details of its short positions” and “sources of its income.”


Already refuted allegations

The Hindenburg report is said to be based on “allegations that have subsequently been judicially proved to be untrue,” according to Adani. “The charges and innuendoes stated in the Hindenburg report are intentionally untrue,” the statement reads. Adani claims that many of the allegations have been “disclosed” by the group in its response to the “88 issues posed by Hindenburg,” and in certain cases, Adani has even secured favorable decisions from bodies like the Supreme Court and the Appellate Tribunal (CESTAT). “Hindenburg has sought to showcase selective media reportage while consciously ignoring judicial decisions,” the statement reads.


Indian industry best practices

According to the Adani Group, Hindenburg’s inquiries about the company’s complex organizational structures fail “to realize that in the infrastructure business, especially in a broad territory like India, most large corporates function in a similar method.”


“Can’t link Adani’s success with India,” was Hindenburg’s response.

The rebuttal claims that none of the important issues mentioned by the report were addressed in Adani’s answer. The reply claims that Adani has instead “stoked a nationalist narrative” that aims to equate Gautam Adani, the company’s chairman, and India’s success with his spectacular ascent and wealth. Adani’s “413 page” answer, in terms of content, only had roughly 30 pages that dealt with topics relating to our study. The remaining portion of the response was made up of 330 pages of court documents, 53 pages of high-level financial information, general data, and specifics on pointless corporate initiatives, like how it supports female entrepreneurship and the production of safe vegetables, according to Hindenburg. Adani’s response “essentially corroborated our findings and ignored our critical queries,” it said, listing the issues that were addressed.


What follows is what?

The problem is not expected to go away anytime soon. According to Hindenburg, it is continuing its investigation into the Adani Group and will be updating its list of problems over the next few days. Adani, on the other hand, has expressed a willingness to take legal action to safeguard its own interests as well as those of its investors.


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