Indian conglomerate Adani Group on Thursday said it is evaluating potential legal action against Hindenburg Research as its various listed companies were hit by a market selloff, a day after the U.S.-based activist investment firm disclosed short positions against the group’s companies and accused the company’s founders of engaging in stock manipulation and fraud.
In an emailed statement, Adani Group Legal Head Jatin Jalundhwala said the company was “evaluating the relevant provisions” under both US and Indian laws for “remedial and punitive action against Hindenburg Research.”
In the statement, the Adani Group again slammed Hindenburg Research’s report calling it “maliciously mischievous [and] unresearched” and adding that it had adversely affected the company, its shareholders and investors.
The statement blamed Hinderburg’s report for creating volatility in the Indian stock markets, adding that it “ has led to unwanted anguish for Indian citizens.”
Labelling Hindenburg as a “foreign entity”, the statement accuses the investment firm of trying to mislead the public and sabotage its flagship entity Adani Enterprises’ Follow-on Public Offering, which is set for Friday.
All seven of the group’s listed companies carrying the Adani moniker and recent acquisitions NDTV, Ambuja Cement and ACC ended Wednesday in the red.
Stock markets in India remained closed on Thursday as the country celebrated its 74th Republic Day.
According to our estimates, Adani Group founder Gautam Adani’s current net worth stands at US$119.1 billion, down by more than US$6.5 billion in the past 24 hours. On Wednesday, Adani ceded the number three spot on the world’s richest list to Amazon founder Jeff Bezos due to the sharp drop in his companies’ stocks.
Hindenburg Research disclosed a short position against the Adani Group’s listed companies in a report published on Tuesday evening while accusing the company of engaging in “brazen stock manipulation and accounting fraud scheme over decades.
The report made a series of scathing accusations, including the alleged use of offshore shell companies for “stock manipulation” and “laundering money” through Adani Group’s private companies onto the books of listed firms “to maintain the appearance of financial health and solvency.” The Adani Group has vehemently denied the accusations labelling them as “a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts.”