Adani Group releases 413-paged rebuttal after $52b share wipe-out

Multi-billion dollar mining conglomerate Adani Group has released a desperate 413-paged document as it scrambles to salvage its sinking share price.

Multibillion dollar mining conglomerate Adani Group has released a desperate 413-paged document as it scrambles to salvage its sinking share price.

Multi-billion dollar mining conglomerate Adani Group has released a desperate 413-page document as it scrambles to salvage its sinking share price.

Last week, US activist short-seller investment group Hindenburg Research released a bombshell report that accused the Adani corporation of carrying out fraud for years on end.

The public’s reaction has been swift and so far unforgiving. Indian mining magnate Gautam Adani’s business has been massacred on the stock market as investors react to the news.

At time of writing, the mass sell-off has seen US$52 billion (A$73 billion) wiped out from the overall market value of the various companies relating to the Adani Group.

The Hindenburg research group has accused the Adani group of “brazen accounting fraud, stock manipulation and money laundering at Adani, taking place over the course of decades” which they also said they had proof for.

Hindenburg also revealed it had taken a short position in Adani Group — meaning it is betting that the company’s stock price will plunge.

On Sunday, the mining released a lengthy rebuttal to save face.

In the document, Adani said what had happened was “nothing short of a calculated securities fraud under applicable law”.

A general view shows the Adani Group headquarters in Ahmedabad, India, on January 27, 2023. Picture: Sujit Jaiswal/AFP

Adani slammed the American research group on being overly critical of the way India’s corporate companies operate.

“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,” Adani wrote.

The firm responded to 65 of the explosive 88 questions posed by the Hindenburg group, noting: “Not one of these 88 questions is based on independent or journalistic fact finding. They are simply selective regurgitations of public disclosures or rhetorical innuendos colouring rumours as fact.”

It comes at a bad time for the Adani group, which is looking to complete a crucial $US2.5 billion ($3.5 billion) shale sale.

Adani Group CFO Jugeshinder Singh also issued a scathing statement rubbishing them as “a malicious combination of selective misinformation and stale, baseless and discredited allegations”.

Gautam Adani has lost billions of his personal fortune as a result of the debacle. Picture: Indranil Mukherjee/AFP

Hindenburg’s bombshell report included claims such as “The Adani Group has previously been the focus of four major government fraud investigations which have alleged money laundering, theft of taxpayer funds and corruption, totalling an estimated $US17 billion.

“Adani family members allegedly co-operated to create offshore shell entities in tax-haven jurisdictions like Mauritius, the UAE, and Caribbean Islands, generating forged import/export documentation in an apparent effort to generate fake or illegitimate turnover and to siphon money from the listed companies.”

Hindenburg said its two-year investigation “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”.

People walk past an electronic signage displaying news on the Adani Group at the Mumbai Stock Exchange (BSE) building in Mumbai on January 27, 2023. Picture: Sujit Jaiswal/AFP

As predicted, the triggered a bloodbath, with investors reacting to the news, sparking a mass sell-off.

On the first day of trading after the report was released, US$12 billion (A$16 billion) was erased from Adani’s once US$218 billion (A$306 billion) mining business, and trading paused on Thursday because of an Indian public holiday.

Then on Friday, a further US$50 billion (A$70 billion) was wiped away. The eye-watering loss came after his flagship firm, Adani Enterprises, dropped by 19 per cent while Adani Green Energy and Adani Total Gas declined by 20 per cent.

At time of writing, the market had not yet opened on Monday.

Mr Adani’s personal fortune has also taken a beating because much of it is staked with his businesses.

The 60-year-old multi-billionaire was officially the world’s third-richest person on Wednesday, but at time of writing, he has now dropped to seventh place, according to Forbes’ Billionaire Index.

In all, he’s lost about US$19 billion (A$26 billion) since the accusations aired last Wednesday.