TLI Staff
New Delhi: Billionaire Gautam Adani-controlled Adani Group on Wednesday vehemently dismissed a report of US-based Hindenburg Research which raised questions over the business conglomerate’s accounting practices and alleged stock manipulation.
The Group CFO Jugeshinder Singh in a statement called the controversial report a malicious combination of selective misinformation and stale, baseless and discredited allegations.
“We are shocked that Hindenburg Research has published a report on 24 January 2023 without making any attempt to contact us or verify the factual matrix. The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts,” the top executive said.
Singh further said that the timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming follow-on public offering (FPO) of the conglomerate’s flagship Adani Enterprises.
All the listed entities of Adani Group tanked on the BSE on Wednesday in the range of 1.5% to 8% eroding the billionaire’s wealth.
The Hindenburg Research report claimed that it had carried out an investigation for two years on the Group and spoken to senior company executives before reaching its conclusion.
“Today we reveal the findings of our 2-year investigation, presenting evidence that the INR 17.8 trillion (U.S. $218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades,” Hindenburg stated.
It further said that Gautam Adani has amassed a net worth of roughly $120 billion, adding over $100 billion in the past 3 years largely through stock price appreciation in the group’s 7 key listed companies, which have spiked an average of 819% in that period.
“Our research involved speaking with dozens of individuals, including former senior executives of the Adani Group, reviewing thousands of documents, and conducting diligence site visits in almost half a dozen countries,” the report said.
“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,” it added.
The report said that key listed Adani companies have also taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing.
“5 of 7 key listed companies have reported ‘current ratios’ below 1, indicating near-term liquidity pressure,” it said.
In August last year, CreditSights had also come up with a report on the corporate behemoth and warned that Adani Group’s overly ambitious debt-funded growth plans could eventually spiral into a massive debt trap.