Adani Group Can File Suit Against Hindenburg Research

The Adani group may file a lawsuit against US-based forensic financial research company Hindenburg Research after it highlighted the Adani group's use of offshore tax havens improperly, stock manipulation, and accounting fraud in a 103-page report released on Wednesday.

The group stated in a statement on Thursday that it is examining pertinent legal provisions in the US and India for corrective and punitive action against Hindenburg Research.

According to Jatin Jalundhwala,  legal head of the Adani Group, “We are deeply disturbed by this intentional and reckless attempt by a foreign entity to mislead the investor community and the general public, undermine the goodwill and reputation of the Adani Group and its leaders, and sabotage the follow-on public offering from Adani Enterprises (AEL),”

In response, Hindenburg Research stated: " Regarding the company’s threats of legal action, to be clear, we will welcome it. We fully stand by our report and believe any legal action against us 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.” the statement continued. 

The market value of all the companies in the Adani group fell by roughly Rs 87,000 crore on Wednesday as their shares fell by as much as 8.1%.

The company claimed that the forensic investigation had a negative impact on its shareholders and investors.

According to Jalundhwala's remark, the report's impact on Indian financial markets has caused significant concern and unwarranted suffering for Indian residents.

In a report titled ‘Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History’  Hindenburg Research claimed that Gautam Adani, the founder and chairman of the Adani Group, had accumulated a net worth of roughly $120 billion, adding over $100 billion in the past three years, primarily through stock price appreciation in the group's seven important listed companies, which had increased by an average of 819% during the time period.

“Clearly, 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,”, according to Jalundhwala.

In addition to other non-Indian reference securities, Hindenburg Research also holds short positions in the Adani Group companies through US-traded bonds and non-Indian derivatives. Adani Wilmar, Adani Power, and Adani Total Gas are three of the Adani group firms that have increased by more than 100% during the last year. Despite Wednesday's decline and the recent trembling ahead of its FPO, Flagship Adani Enterprises is up about 95%. On Wednesday, the business finalized the allocation of 18.26 million FPO equity shares to 33 investors, totaling an estimated Rs 6,000 crore, due to the oversubscription of the anchor book of the ongoing AEL FPO.