Editor's Pick: Hindenburg report ‘calculated attack on India’, says Adani Group

Issuing a detailed rebuttal to American short seller Hindenburg Research’s report accusing the Adani Group of “stock manipulation and accounting malpractices”, the Ahmedabad-based conglomerate of billionaire Gautam Adani on Sunday called the report an “attack on India and its independent institutions”. The company issued a 413-page rejoinder before markets opened on Monday, calling the report “baseless” and “driven by an ulterior motive to create a false market”, and to allow the U.S. firm to make financial gains. “This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” the Adani Group’s rejoinder said. It added that all its listed entities have a “robust governance framework”. The Group also reiterated in its statement that it would explore legal options. This is the first detailed response by the conglomerate after the U.S. firm in a media statement on January 26 said it would “welcome” the Adani Group’s threat of legal action. The short seller had said that its investigation report was prepared over a period of two years and involved visits to multiple countries, mining of documents and data and talking to executives who had worked with the Indian conglomerate. The Adani Group rubbished the 88 questions the Hindenburg report contains. “They are simply selective regurgitations of public disclosures or rhetorical innuendos colouring rumours as fact…” The report, however, has triggered a sell-off in the group’s stocks, coming at a time when Adani Enterprises, the group’s flagship firm, has launched a ₹20,000 crore follow-on public offer (FPO). It has also driven investor concern about broader financial sector stability and the robustness of the country’s market regulation framework. Not only did the stock rout in the Adani Group cause gyrations in the market, but it also affected banking shares led by the State Bank of India and the state-owned LIC appreciably on Friday, which have sizeable investments in the Group. All this while, there’s not been any official word from Securities and Exchange Board of India (SEBI), aside from a media report that said the market regulator had stepped up scrutiny of the conglomerate’s transactions. Hindenburg Research is a small firm founded by Nathan ‘Nate’ Anderson in 2017 is a short seller that has built its reputation over its focus on forensic financial research. Notwithstanding how the Adani Group addresses the concerns raised in the short seller’s report as well as those of domestic investors, it is true that short sellers have earned themselves a reputation of serving as early warning systems of corporate and market malfeasance. As this editorial in today’s edition of The Hindu points out, amid the market stir created by the report, India’s regulators including SEBI and the Reserve Bank of India have an opportunity, nay an obligation, to clear the air by allaying fears of any broader systemic contagion. While it is true that the Adani Group’s stocks do not have a significant presence or weight on the major benchmark stock indices, there can be little argument that the major state-owned banks and the LIC, which have significant exposure to the conglomerate, are key pillars of the country’s financial system. The Hindu’s Editorials Warning bells: On the Adani saga Chasing records: On Novak Djokovic’s 10th Australian Open win The Hindu’s Daily News Quiz In which city in India in 1959 was the Gandhi Memorial Museum established? Madurai Delhi Ahmedabad Mumbai To know the answer and to play the full quiz, click here. [logo] Editor's Pick 30 JANUARY 2023 [The Hindu logo] In the Editor's Pick newsletter, The Hindu explains why a story was important enough to be carried on the front page of today's edition of our newspaper. [Arrow]( [Open in browser]( [Mail icon]( [More newsletters]( Hindenburg report ‘calculated attack on India’, says Adani Group Issuing a [detailed rebuttal]( to American short seller Hindenburg Research’s report accusing the Adani Group of “stock manipulation and accounting malpractices”, the Ahmedabad-based conglomerate of billionaire Gautam Adani on Sunday called the report an “attack on India and its independent institutions”. The company issued a 413-page rejoinder before markets opened on Monday, calling the report “baseless” and “driven by an ulterior motive to create a false market”, and to allow the U.S. firm to make financial gains. “This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” the Adani Group’s rejoinder said. It added that all its listed entities have a “robust governance framework”. The Group also reiterated in its statement that it would explore legal options. This is the first detailed response by the conglomerate after the U.S. firm in a media statement on January 26 said it would “welcome” the Adani Group’s threat of legal action. The short seller had said that its investigation report was prepared over a period of two years and involved visits to multiple countries, mining of documents and data and talking to executives who had worked with the Indian conglomerate. The Adani Group rubbished the 88 questions the Hindenburg report contains. “They are simply selective regurgitations of public disclosures or rhetorical innuendos colouring rumours as fact…” The report, however, has triggered a sell-off in the group’s stocks, coming at a time when Adani Enterprises, the group’s flagship firm, has launched a ₹20,000 crore follow-on public offer (FPO). It has also driven investor concern about broader financial sector stability and the robustness of the country’s market regulation framework. Not only did the [stock rout]( in the Adani Group cause gyrations in the market, but it also [affected banking shares]( led by the State Bank of India and the state-owned LIC appreciably on Friday, which have sizeable investments in the Group. All this while, there’s not been any official word from Securities and Exchange Board of India (SEBI), aside from a media report that said the market regulator had stepped up scrutiny of the conglomerate’s transactions. [Hindenburg Research]( is a small firm founded by Nathan ‘Nate’ Anderson in 2017 is a short seller that has built its reputation over its focus on forensic financial research. Notwithstanding how the Adani Group addresses the concerns raised in the short seller’s report as well as those of domestic investors, it is true that short sellers have earned themselves a reputation of serving as early warning systems of corporate and market malfeasance. As this [editorial]( in today’s edition of The Hindu points out, amid the market stir created by the report, India’s regulators including SEBI and the Reserve Bank of India have an opportunity, nay an obligation, to clear the air by allaying fears of any broader systemic contagion. While it is true that the Adani Group’s stocks do not have a significant presence or weight on the major benchmark stock indices, there can be little argument that the major state-owned banks and the LIC, which have significant exposure to the conglomerate, are key pillars of the country’s financial system. The Hindu’s Editorials [Arrow][Warning bells: On the Adani saga]( [Arrow][Chasing records: On Novak Djokovic’s 10th Australian Open win]( The Hindu’s Daily News Quiz In which city in India in 1959 was the Gandhi Memorial Museum established? - Madurai - Delhi - Ahmedabad - Mumbai To know the answer and to play the full quiz, [click here](. Are you a book lover looking for your next literary adventure? Look no further than “The Hindu On Books” weekly newsletter! We scour the shelves to bring you the best new releases and hidden gems in all genres. With in-depth book reviews and recommendations, you can trust that you will find your next literary love here. 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