Adani Group: Hindenburg Report is ‘Bogus’ and Its ‘investigation’ devoid of facts; May take Legal Action!

The Adani Group claimed on Friday that Hindenburg Research's research into accounting or fraud allegations is devoid of facts.

Hindenburg Report is ‘Bogus’; Adani may take legal action

Reetu | Jan 28, 2023 | Views

Adani Group: Hindenburg Report is ‘Bogus’ and Its ‘investigation’ devoid of facts; May take Legal Action!

Adani Group: Hindenburg Report is ‘Bogus’ and Its ‘investigation’ devoid of facts; May take Legal Action!

The Adani Group claimed on Friday that Hindenburg Research’s report into accounting or fraud allegations is devoid of facts because eight of the conglomerate’s nine publicly listed companies are audited by “one of the Big 6.”

While Adani Ports & SEZ and Adani Transmission are audited by Deloitte Haskins & Sells, Adani Power is audited by accounting firm SRBC & Co. According to a presentation, Adani Green Energy counts SRBC & Co. (EY) and Dharmesh Parikh & Co. as joint auditors.

However, Adani Enterprises, which kicked off its follow-on public offer (FPO) on Friday, and Adani Total Gas are audited by Shah Dhandharia & Co.

In its report, the US-based Hindenburg Research accused the group of “brazen stock manipulation and accounting fraud,” which wiped about Rs 97,000 crore off the value of his conglomerate’s shares in Wednesday’s trade.

Short seller Hindenburg Research stated in its 106-page research that the independent auditor for Adani Enterprises and Adani Total Gas is “a little entity called Shah Dhandharia.”

“When they began clearing Adani Enterprises and Adani Total Gas’ annual audits, the audit partners at Shah Dhandharia were as young as 24 and 23 years old, respectively. They were essentially fresh out of school, ill-equipped to investigate and hold to account the financials of some of the country’s greatest corporations, led by one of its most influential men.” the U.S.-based short seller claimed.

“Shah Dhandharia does not appear to be capable of performing difficult audit job. Adani Enterprises, for example, has 156 subsidiaries and many more joint ventures and affiliates. Furthermore, according to BSE disclosures, Adani’s seven core listed firms have 578 subsidiaries and have engaged in a total of 6,025 unique related-party transactions in financial year 2022 alone.”the report alleged.

“We are reviewing relevant avenues under US and Indian legislation for corrective and punitive action against Hindenburg,” Adani Group’s legal chief Jatin Jalundhwala said on Thursday.

The American firm subsequently said in its Twitter handle: “If Adani is serious, it should also file suit in the US where we operate. We have a long list of documents we would demand in a legal discovery process.”

“In the 36 hours since we released our report, Adani hasn’t addressed a single fundamental issue we highlighted,” Hindenburg, described by Fortune as “one of Wall Street’s most dreaded short-selling research firms,” said on Twitter. “At the end of our report, we asked 88 straightforward questions that we hope will help the corporation to be transparent. Adani has yet to respond to any of these questions “According to the US company, “Instead, as expected, Adani has resorted to bluster and threats.”

In response to Adani’s threat to sue Hindenburg, the research firm stated: “We welcome it. We fully support our report and believe that any legal action taken against us would have no merit.”

Later that day, Adani Group published a report titled “myths of short sellers” on its website. According to the report, Hindenburg’s 21 questions on related party transactions and court proceedings are “nothing more than Adani Group of companies’ own public disclosure from as far back as 2015.”

Meanwhile, Adani Group stock continued to fall for the second consecutive session. Adani Transmission shares fell as much as 20% to Rs.2,024 on the National Stock Exchange (NSE). Shares of Adani Green Energy, Adani’s green energy arm, fell 20% to Rs.1,501 on the NSE.


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