Hindenburg Research accusations denied by Adani as ‘baseless’ while activist investor claims legal action will reveal accounting fraud
“Regarding the company’s threats of legal action, to be clear, we would welcome it. We fully stand by our report and believe any legal action taken against us would be meritless.Activist investors like Hindenburg typically take a short position in a listed company they believe is heavily overvalued and has poor or fraudulent business practices. Their reports can lead to sustained pressure on the share price of their targets.
The battle comes amid a large scheduled fundraising attempt by Adani Enterprises, the company’s listed flagship, in which Adani is seeking US$2.5bn from investors to fund capital expenditure and reduce debt. “Clearly, the report and its unsubstantiated contents were designed to have a deleterious effect on the share values ofcompanies as Hindenburg Research, by their own admission, is positioned to benefit from a slide in Adani shares,” Adani Group’s legal head Jatin Jalundhwala said in a statement on Thursday.
Adani has previously said that allegations in the report had been discredited and rejected by India’s highest courts, and that Hindenburg had not attempted to verify information with the company before publishing.The Hindenburg report cited a series of transactions tied to Adani’s Australian operations that it alleged may have allowed Adani to avoid disclosing large asset impairments to investors.
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