Adani shares suspended as US short seller 'fraud' claims sparks selloff
By Frank Prenesti
Date: Friday 27 Jan 2023
(Sharecast News) - Shares in Indian conglomerate Adani were suspended on Friday after plunging 15% as US short seller Hindenburg published an explosive report accusing it of "brazen" corporate fraud.
Further falls in Friday trade took losses for the week to $42bn after Hindenburg alleged Adani Group - owned by Gautam Adani, Asia's richest man - had used undisclosed related-party transactions and earnings manipulation to "maintain the appearance of financial health and solvency" of its listed operations.
It described the alleged practices as the "biggest con in corporate history". Hindenburg has dared Adani to sue after the company slammed the report as "maliciously mischievous and "unresearched".
Adani's interests range from Australian coal mines to India's biggest ports. It said Thursday it was the victim of a "maliciously mischievous unresearched" reputational attack by Hindenburg just as it was preparing for a major fundraising round.
The group's legal chief Jatin Jalundhwala said the conglomerate was exploring "remedial and punitive" options action against the research firm in US and Indian courts.
"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 Follow-on Public Offering from Adani Enterprises," he said in a statement.
The $2.5bn follow-on public offer, India's biggest, due to open for bids on Friday and aimed at bolstering the business empire's balance sheet.
In response, Hindenburg said Adani had ducked the issues its research had raised and instead resorted to "bluster and threats".
Reporting by Frank Prenesti for Sharecast.com
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