Hindenburg says he would welcome legal action from Adani Group

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New Delhi: Hindenburg Research said on Thursday it would require documents as part of a legal discovery process if Adani Group files a lawsuit in the United States against the short seller over its report on the Indian conglomerate.

He said the company fully respected his report and that any action against them would be “without merit”. “As for threats of legal action from the company, to be clear, we would welcome them,” the US-based short seller said.

“In the 36 hours since the publication of our report, Adani has not addressed a single substantive issue that we have raised. At the end of our report, we have asked 88 simple questions which we believe give the company a chance to be transparent. So far, Adani hasn’t answered any of these questions,” Hindenburg Research said.

“If Adani is serious, he should also file a complaint in the United States where we operate. We have a long list of documents that we would require in a legal discovery process,” he added.

Our response to Adani: pic.twitter.com/6NcFKR8gEL

Hindenburg Research (@HindenburgRes) January 26, 2023

Hindenburg Research has alleged that the Adani Group, led by the world’s third richest person, Gautam Adani, is involved in a massive and brazen stock manipulation and accounting fraud scheme. He said the company is “doing the biggest scam in corporate history”.

The allegations sent bonds and stocks of the conglomerate companies plummeting.

According to Reuters, he said the main listed companies of the Adani group were heavily indebted, which put the whole group in a precarious financial situation.

He also said seven Adani-listed companies were down 85% on a fundamental basis due to what she called sky-high valuations.

Hindenburg’s report said five of Adani’s seven major listed companies reported current ratios a measure of liquid assets minus current liabilities below 1. This, the short seller said, suggested “liquidity risk in the short term increased,” the news agency said.

In a statement released Wednesday, January 25, Adani Group said it was shocked that the report was released without the company being contacted. The report is a malicious combination of selective misinformation and outdated, baseless and discredited allegations that have been tested and thrown out by India’s highest court, he said.

Research firm CreditSights in August 2022 had flagged Adani Group’s appetite for debt-financed expansion. Although he later revised some of the calculations, he nevertheless raised concerns about the group’s overall level of debt.

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