India-based conglomerate Adani Group is prepping for a potential legal war with Hindenburg Research after the influential short-seller accused company founder Gautam Adani of overseeing “the largest con in corporate history.”
Adani’s top legal officer Jatin Jalundhwala said Hindenburg’s “maliciously mischievous, unresearched report” had “adversely affected” the company’s shareholders and caused “unwanted anguish for Indian citizens.”
“We are deeply disturbed by this intentional and reckless attempt by a foreign entity to mislead the investor community and the general public,” Jalundhwala said in a statement Thursday.
“We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research,” Jalundhwala added.
Earlier this week, the firm revealed it had taken a short position on Adani Group. Hindenburg alleged it uncovered evidence that Adani — the richest man in Asia — had “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades.”
Adani-affiliated firms lost a combined $12 billion in market value after Hindenburg leveled its claims.
The firm said Adani, his family members and other close associates utilize a network of offshore shell companies located in tax shelters across Mauritius, the United Arab Emirates and the Caribbean.
Hindenburg Research fired back Thursday at Adani Group’s threat of legal action in a lengthy statement posted on Twitter.
“In the 36 hours since we released our report, Adani hasn’t addressed a single substantive issue we raised,” Hindenburg said. “Instead, as expected, Adani has resorted to bluster and threats.”
“Regarding the company’s threats of legal action, to be clear, we would welcome it. We fully stand by our report and believe any legal action taken against us would be meritless,” the firm added. “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.”
Adani’s personal fortune fell by approximately $6 billion to $113 billion since Hindenburg released its report, according to the Bloomberg Billionaires Index.
Adani, 60, also slipped one spot on the list of the world’s richest individuals and now trails Bernard Arnault, Elon Musk and Jeff Bezos.
Hindenburg alleged that Adani-linked firms had “taken on substantial debt” that put “the entire group on precarious financial footing.” The short-seller said its findings were based on a two-year investigation that included dozens of interviews and a review of internal documents.
“Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its 7 key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations,” Hindenburg said.
Adani Group CFO Jugeshindar Singh previously described the allegations as “baseless and discredited.”
Adani Group alleged that Hindenburg’s claims about its operations were “designed to have a deleterious effect on the share values of Adani Group companies” and noted the short-seller had a financial interest in seeing its valuations plummet.
Founded by Nathan Anderson in 2017, Hindenburg has gained notoriety in recent years while waging public battles with firms it deems to be mismanaged.
The short-seller most notably targeted electric truck maker Nikola, publishing a report in 2020 in which it accused company founder Trevor Milton of overseeing an “intricate fraud” that included a faked video of one of its vehicles driving down a highway. Milton was later convicted of securities fraud.
