India's Adani Group says it is evaluating action against Hindenburg Research
The logo of the Adani Group is seen on the facade of one of its buildings on the outskirts of Ahmedabad, India, on Apr 13, 2021. (File photo: Reuters/Amit Dave)
BENGALURU: Adani Group said on Thursday (Jan 26) that it is evaluating "remedial and punitive action" under United States and Indian laws against short-seller Hindenburg Research, which in a report accused the conglomerate of improper use of offshore tax havens.
Shares in seven listed group companies of Adani lost US$10.73 billion in market capitalisation in India on Wednesday after Hindenburg released the report, which also said it held short positions in the conglomerate through its US-traded bonds and non-Indian-traded derivative instruments. Adani's US bonds also fell.
In a statement to Indian exchanges, Adani Group's head of legal, Jatin Jalundhwala, called the report by the US research group "maliciously mischievous" and "unresearched".
"We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research," Jalundhwala said in the statement.
The report had "adversely affected the Adani Group, (its) shareholders and investors" Jalundhwala said, adding that "the volatility in Indian stock markets created by the report is of great concern".
In a statement posted on its Twitter account, Hindenburg said "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," it added.
Founded by Nathan Anderson in 2017, Hindenburg says that it looks for "man-made disasters" in companies, such as accounting irregularities and mismanagement.
The Jan 24 report questioned how the Adani Group, which is led by Gautam Adani, the world's fourth-richest person according to Forbes, has used offshore entities in offshore tax havens such as Mauritius and the Caribbean islands.
It also said that key listed Adani companies had "substantial debt" which has put the entire group on a "precarious financial footing".
Adani on Wednesday called the report baseless.
The report coincided with Adani's upcoming US$2.5 billion secondary share sale on Friday. The anchor portion of the issue saw participation from Maybank Securities and the Abu Dhabi Investment Authority among others on Wednesday.
