February 1, 2023

Gautam Adani, Asia’s richest man, slams short-seller Hindenburg’s claims as ‘baseless’ and ‘malicious’

3 min read

New Delhi

of India The Adani Group on Wednesday termed the fraud allegations leveled by US-based short seller Hindenburg Research as “baseless” and a “malicious collection of selective misinformation”.

Hindenburg Research published a The investigation On the billionaire By Gautam Adani On Tuesday, the sprawling conglomerate accused him of “a brazen stock manipulation and accounting fraud scheme spanning decades.”

Hindenburg said it has taken short positions in Adani group companies “through US commercial bonds and non-Indian-traded derivative instruments”. The goal of short sellers is to make money by betting that the stock price of the companies they target will fall.

Adani’s business empire includes seven listed companies – in sectors ranging from ports to power stations – and shares in most of them fell between 3% and 8% on Wednesday.

In its investigation, which Hindenburg took two years to compile, the research firm questioned the “skyrocketing valuations” of the Adani firms and said their “substantial debt” put the entire group “on a precarious financial footing”. keeps

The research firm concludes its report with 88 questions for Adani Group. It ranged from seeking details about Adani’s offshore entities to why it has “such a complex, interconnected corporate structure”.

CNN has not confirmed the claims in the report, and India’s stock market regulator did not immediately respond to a request for comment.

Over the past few years, shares in Adani’s companies have soared, making him Asia’s richest man.

In a statement released hours after Hindenburg published its report, Adani Group Chief Financial Officer Jogeshinder Singh said Hindenburg “made no attempt to contact us or verify the facts,” and It added that the short seller’s allegations are baseless. “Stale, baseless and disreputable.”

The party has Scrutiny faced In 2021, shares of Adani’s companies fell after the Economic Times newspaper said foreign funds holding billions of dollars in shares had been frozen by the country’s National Securities Depository. The Adani Group termed the report as “blatantly false”.

Nate Anderson, who founded Hindenburg Researchhas made a name for himself over the past few years by targeting companies he thinks are overvalued and whose finances are suspect. Anderson is the most famous. go after Electric truck company Nikola called it a “sophisticated fraud” in 2020, sending the firm’s stock plummeting. Nicola was the founder in 2022. Convicted He was accused in one case by a US jury of fraud that he lied to investors about the company’s technology.

But some have accused Hindenburg of trying to undercut the stock with his research reports to turn a profit.

It reports on the Adani Group. at a sensitive time. This weekendAdani Enterprises, the group’s flagship company, plans to raise 200 billion rupees ($2.5 billion) by issuing new shares.

“The timing of the publication of the report clearly betrays a brazen attempt to damage the Adani Group’s reputation, with the primary objective of damaging the upcoming follow-on public offering,” Singh said.

There is a party. Five new businesses are also considering taking the stock market in the next two to five years.

A college dropout and self-made entrepreneur, Adani is worth around $120 billion, making him the fourth richest man in the world, behind Bill Gates and Warren Buffett. Bloomberg Billionaires Index. He is also seen as a close ally of the current Prime Minister of India, Narendra Modi.

But this is not the first time that analysts have expressed concern that the rapid expansion of its business is at great risk. Adani’s juggernaut has been fueled by $30 billion in debt, making its business the most indebted in the country.

Last year, Credit Sites, a research firm owned by Fitch Group, published a report on Adani Group titled “Deeply Overleveraged” in which it expressed serious concerns about its debt-driven growth plans. What did

The Adani Group responded to credit sites with a 15-page report, saying its companies’ “leverage ratios” were “healthy and in line with industry standards in the respective sectors” and that they had “consistently What is “De Lever”? In the last nine years.

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