Shares of Adani Group’s seven listed companies crashed for the second straight day on Friday, extended their fall after Hindenburg Research said that it took a short position in certain securities of the group which the Group dismissed as as ‘baseless’.
The conglomerate termed the report on the group ‘malicious combination of selective misinformation and stale’ and is exploring legal action against the US investor on its report alleging ‘brazen’ market manipulation and accounting fraud by Asia’s richest man’s empire.
Adani Transmission shares tumbled over 19% and Adani Total Gas sank 19.1% in their biggest daily drop since mid-March 2020, while Adani Green Energy sank about 16% on the BSE in early trading session.
Meanwhile, Adani Enterprises was trading over 2% lower even as it kicked off the ₹20,000 crore follow-on public offer (FPO) today. It will sell shares in the price band of ₹3,112 to ₹3,276 apiece and the issue will close on January 31, 2023. The flagship firm of billionaire Gautam Adani-led conglomerate on Wednesday said it has raised ₹5,985 crore from anchor investors ahead of the offer.
In a statement later on Twitter, Hindenburg said it fully stands by its report and would in fact welcome any legal action by Adani group. “If Adani is serious, it should also file suit in the U.S. where we operate. We have a long list of documents we would demand in a legal discovery process,” the statement posted on Twitter read.
The Hindenburg’s report details a web of Adani-family-controlled offshore shell entities in tax havens spanning the Caribbean and Mauritius to the United Arab Emirates, which it claims were used to facilitate corruption, money laundering and taxpayer theft while siphoning off money from the group’s listed companies.
Adani Group has repeatedly dismissed debt concerns. Its Chief Financial Officer (CFO) Jugeshinder Singh on January 21 on a media call stated that “We are deeply disturbed by this intentional and reckless attempt by a foreign entity to mislead the investor community and the general public, undermine the goodwill and reputation of the Adani Group and its leaders, and sabotage the FPO (Follow-on Public Offering) from Adani Enterprises.”
(With inputs from agencies)
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