Adani Group hits back at Hindenburg in 413-page rebuttal to fraud allegations

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Defending its practice of pledging the shares of its promoters or key shareholders, the Adani Group said in its response that raising finance against shares as collateral was common practice around the world and that loans were granted by large institutions and banks on the basis of an in-depth credit analysis.

The group added that there was a robust disclosure system in place in India, whereby listed companies were required to disclose their overall share pledge position to stock exchanges from time to time.

He said his promoter pledge positions in holding companies fell from more than 50% in March 2020 in some listed stocks to less than 20% in December 2022.

The Hindenburg report and its fallout are seen as one of the biggest career challenges for Mr. Adani, whose business interests range from ports, airports, mining and power to media and cement.

The Adani Group’s response included more than 350 pages of appendices containing excerpts from annual reports, public disclosures and prior court rulings.

Hindenburg, the group said, had sought answers to 88 questions in its report, but 65 of them related to questions that had been disclosed by Adani’s portfolio companies in annual reports.

The rest, Adani said, relate to public shareholders and third parties, and some were baseless allegations based on imaginary fact patterns.

Hindenburg, known for shorting electric truck maker Nikola and Twitter, said he held short positions in Adani companies through US-traded bonds and non-India-traded derivatives. .

The group has also responded to Hindenburg’s claims about its auditors, saying that all of those auditors we have engaged have been duly certified and qualified by the relevant statutory bodies.

His response comes just hours before the Indian market opens, when the $2.5 billion secondary equity sale enters its second day of underwriting. Friday’s plunge sent shares of Adani Enterprises below the issue price, raising doubts about its success.

In a separate statement on Sunday, Adani’s chief financial officer, Jugeshinder Singh, said the group was focused on selling shares and was confident it would be successful. He also said his main investors showed faith and stayed invested.

We are confident that the FPO (follow-on public offering) will pass as well, he said. Reuters

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