Hindenburg on Adani’s rebuttal: Cannot obfuscate by nationalism
WEB DESK
Despite rebuttal, most of Adani stocks dropped on Monday as Group’s companies extended a $51 billion stock selloff, an indication that the billionaire’s rebuttal of fraud allegations from American short seller Hindenburg Research is largely failing to convince investors. The dollar bonds also fell.
Adani Green Energy Ltd., Adani Total Gas Ltd. and Adani Transmission Ltd. each fell by more than 10% as trading started in Mumbai, while Gautam Adani’s flagship firm Adani Enterprises Ltd. defied the trend by rising 6.3%.
In its rebuttal published Sunday, Adani said that some 65 of the 88 questions have been addressed in the conglomerate’s public disclosures, describing the short seller’s conduct as “nothing short of a calculated securities fraud under applicable law.” It reiterated it will “exercise our rights to pursue remedies to safeguard our stakeholders before all appropriate authorities.”
The lengthy response comes in the last leg of a share offer by Adani Enterprises, which received overall subscriptions of 1% for the institutional and retail portion on Friday. While investors in Indian public offerings typically wait until the last day of the sale to place bids, there were concerns that Hindenburg’s attack on the country’s richest man would sour sentiment.
In the latest twist, Hindenburg said Monday that Adani’s rebuttal has failed to specifically answer 62 of 88 questions posed by the short-seller. “Of the questions it did answer, the group largely confirmed or attempted to sidestep our findings,” it said in a statement.
The Hindenburg Research on January 30 described as an “attempt to obfuscate by nationalism” the Adani Group’s 413-page rebuttal to its accusations of stock manipulation and use of tax havens in a report that also flagged debt worries.
“The Adani Group has not even attempted to clarify its relationship with a Chinese National (Chang Chung-Ling), despite a plethora of linkages,” the US-based short seller said.
In its latest statement, Hindenburg Research said that the Adani Group did not respond to questions in its original report, pointing out one on the nature of relationship between Vinod Adani, Gautam Adani’s older brother, and Chang Chung-Ling, nor the group’s association with the Chinese national.
It alleged that its report had shown in one example how an entity that had been an Adani-related party made a major investment in one of the suspect offshore holders, “drawing a clear line between the Adani Group and the suspected stock parking entities”, it said.