Fraud cannot be obfuscated by nationalism, says Hindenburg

MUMBAI: Hitting back at Adani Group’s 413-page response in which it likened Hindenburg Research’s allegations to a “calculated attack on India”, the US-based firm said on Monday that “fraud cannot be obfuscated by nationalism”. It added that the Ahmedabad-based conglomerate is leading the focus away from substantive issues by stoking a nationalist narrative.

“Adani Group has attempted to conflate its meteoric rise and the wealth of its chairman, Gautam Adani, with the success of India itself. We disagree. To be clear, we believe India is a vibrant democracy and an emerging superpower with an exciting future,” said Hindenburg. It added that “India’s future is being held back by the conglomerate, which has draped itself in the Indian flag while systematically looting the nation”.

Hindenburg contended that it had asked 88 questions in its 106-page report, but the group failed to specifically answer 62 of them in its response. Instead, it mainly grouped questions together in categories and provided generalised deflections. “Of the few questions it did answer, its responses largely confirmed our findings, as we detail,” Hindenburg said.

Just before the group’s flagship Adani Enterprises launched its Rs 20,000-crore follow-on offering, Hindenburg published a report on January 24 alleging the conglomerate of brazen stock manipulation and accounting fraud. Since then, Adani Group has been grappling to contain the damage the report is having on the shares of its 10 listed entities.

Hindenburg, while standing firm on its report, said in its reply, “Fraud is fraud, even when it’s perpetrated by one of the wealthiest individuals in the world.”

The January 24 Hindenburg report pointed to a web of Adani family-controlled offshore shell entities in tax havens serving “several functions, including stock parking/stock manipulation and laundering money through Adani’s private companies onto the listed companies’ balance sheets in order to maintain the appearance of financial health and solvency”.

The Adani Group had subsequently termed the report as “maliciously mischievous” and “unresearched”, and said that it is considering taking legal action against Hindenburg.