Adani says examining legal options against Hindenburg; US firm stands by its 106-page report

Days after a US-based investment research firm, Hindenburg said that its two-year investigation revealed that Adani Group has "engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades", Adani Group says examining legal options against Hindenburg.

The Adani Group on Thursday said it is examining legal options to take "punitive action" against Hindenburg Research for its "reckless" attempt to sabotage a mega share sale at the conglomerate's flagship firm - a statement that the US activist investor responded by saying it stands by its report that alleged "brazen" market manipulation and accounting fraud by the group.

"The maliciously mischievous, unresearched report published by Hindenburg Research on January 24, 2023, has adversely affected the Adani Group, our shareholders and investors. The volatility in Indian stock markets created by the report is of great concern and has led to unwanted anguish for Indian citizens," Adani Group's lead head Jatin Jalundhwala said in a statement.

The report and its unsubstantiated contents were designed to have a deleterious effect on the share values of Adani Group companies as Hindenburg Research, by their own admission, is positioned to benefit from a slide in Adani shares, he said.

The report came just as a Rs 20,000 crore follow-on share sale of Adani Enterprises opened for institutional investors.

"In the 36 hours since we released our report, Adani hasn't addressed a single substantive issue we raised," Hindenburg Research said. "At the conclusion of our report, we asked 88 straightforward questions that we believe give the company a chance to be transparent. Thus far, Adani has answered none of these questions." Stating that it "fully stands" by the report, Hindenburg said it believes any legal action taken against it would be meritless.

"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," it said, adding Adani has in its statements referred to its 106-page, 32,000-word report, with over 720 citations and prepared over the course of 2 years, as unresearched.