Securities fraud by the ‘Madoffs of Manhattan’, says Adani group
Terming Hindenburg Research’s conduct a “securities fraud”, the Adani group on Sunday night said it was shocked and deeply disturbed to read the report published by the “Madoffs of Manhattan”.
It further said the report by Hindenburg Research is nothing but a lie.
In a 413-page document, Adani retaliated against the American short-seller, saying the document was a “malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations to drive an ulterior motive”.
“This is rife with conflict of interest and intended only to create a false market in securities to enable Hindenburg, an admitted short seller, to book massive financial gain through wrongful means at the cost of countless investors. It is tremendously concerning that the statements of an entity sitting thousands of miles away, with
no credibility or ethics has caused a serious and unprecedented adverse impact on our investors,” a Adani group statement said.
Earlier in the day, Adani group’s Chief Financial Officer Jugeshinder Singh told Business Standard its companies are churning out Rs 1,100 crore of Ebitda (earnings before interest, taxes, depreciation, and amortisation) a week and the group’s investment plan in the hydrogen business remains on track.
“There is no change in our follow-on public offer (FPO) plans and we are extremely confident of its success. The hydrogen project’s development is not contingent on this (the adverse report of short-seller Hindenburg). Our main focus remains on running our businesses,” Singh said.
The Rs 20,000-crore FPO is raising half the proceeds, with the rest to be mobilised over the next few months.
The FPO closes on Tuesday.
“Our message to our investors is that our group has large industrial companies and we remain fully invested. Our strategic partners are long-term and they too remain fully invested. The fundamental nature of our business is that everything (investment) is done based on operating assets. We hardly have to borrow anything or raise capital for general purposes,” Singh said.
Of the FPO proceeds, the group flagship, Adani Enterprises, is planning to invest Rs 11,000 crore in the hydrogen business and Rs 4,000 crore to reduce debt.
Calling Hindenburg’s report “gas and fire”, Singh said it deliberately used only part of the group’s disclosures in the past to make a misleading point.
“This is not a mistake but a malicious misrepresentation of facts and 68 out of their 88 questions are like this. For example, in the particular matter of DRI (directorate of revenue intelligence), the Supreme Court has given a final judgment. They know this as this was our disclosure in 15 different documents over several years. If they see any of these documents, they would know that they are wrong. They deliberately did this to mislead investors.”
Singh said the group companies were still collating data and would move the Securities and Exchange Board of India against the short-seller once data collation was completed.
To read Adani Group’s full response, click here.
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