American short-seller Hindenburg Research’s report on the Adani Group in January was “targeted misformation” aimed to damage its reputation and misused by “vested interests”, Gautam Adani, chairman of the Indian business conglomerate, has said.
Adani, in a letter to shareholders of group flagship Adani Enterprises, said Hindenburg published the report before India’s Republic Day and just as the company was planning a follow-on public offering (FPO) that would have been the largest in India’s market history.
“The report was a combination of targeted misinformation and outdated, discredited allegations aimed at damaging our reputation and generating profits through a deliberate drive-down of our stock prices,” he said.
Despite a fully subscribed FPO, the group decided to return the money to investors and protect their interests.
“The short-selling incident resulted in several adverse consequences that we had to confront. Even though we promptly issued a comprehensive rebuttal, various vested interests tried to opportunistically exploit the claims made by the short seller. These entities engaged and encouraged false narratives across news and social platforms,” said Adani.
India’s Supreme Court has set up an expert committee comprising individuals known for their independence and integrity to look into Hindenburg’s allegations. The committee’s report made public in May 2023, said it had not found any regulatory failure.
“The Committee’s Report not only observed that the mitigating measures undertaken by your company helped rebuild confidence but also cited that there were credible charges of concerted destabilization of the Indian markets. It also confirmed the quality of our Group’s disclosures and found no instance of regulatory failure or any breach. While the SEBI is still to submit its report in the months ahead, we remain confident of our governance and disclosure standards,” Adani said, referring to India’s market regulator.
Since Hindenburg’s report, Adani Group shares have recovered but lost Rs 12.5 trillion of market capitalization when compared to their September 2022 peak.
