Adani shares fall further as they consider legal action against Hindenburg

Adani Group Chairman and Founder Gautam Adani during the News18 Rising India Summit on February 25, 2019 in New Delhi, India. Since becoming a billionaire in 2008, Adani is now one of the richest people in the world, with a fortune of $113 billion, according to the Bloomberg Billionaires Index.

Hindustan Times | Hindustan Times | Getty Images

Shares of Adani Group companies continued to post steep losses for a second consecutive trading session in India, after short-selling firm Hindenburg announced its short position in the conglomerate companies earlier this week.

In a lengthy report released earlier this week, Hindenburg detailed multiple allegations against the conglomerate companies, saying the group had «engaged in a shameless scheme of stock manipulation and accounting fraud over decades.»

Adani denied the claims in two separate statements, describing the short seller’s claims as an «intentional and reckless attempt by a foreign entity to mislead the investment community and the general public,» according to a press release.

“We are evaluating the relevant provisions of US and Indian laws regarding remedial and punitive action against Hidenburg Research,” Adani Group Chief Legal Officer Jatin Jalundhwala said.

Shares of Mumbai-listed Adani Enterprises fell more than 9% in India’s trading session on Friday. Adani Transmission fell 19.47%, Adani green energy lost 19.89% and Adani Power lost 5%. Adani Port’s share price also fell 13.8%.

The moves follow Wednesday’s losses after the initial release of Hindenburg’s report. The Indian stock exchange was closed on Thursday.

The short-selling firm doubled down on its original position after Adani’s responses, pointing out that the conglomerate did not respond to any of the issues raised, adding that any lawsuits against Hindenburg will be «without merit.»

«If Adani is serious, he should also file a complaint in the United States where we operate. We have a long list of documents that we would require as part of a legal discovery process,» he said.

«We fully respect our report and believe any legal action against us would be without merit,» he said.

Billionaire investor and Pershing Square Capital Management CEO Bill Ackman voiced his support for the short-selling firm in a tweet posted shortly before the Indian market opened.

«I found the Hindenburg report to be highly credible and extremely well-researched,» he wrote, adding that the Adani Group’s response «says a lot.»

“Caution emptor,” he added.

$2.5 billion stock offering

The latest back-and-forth between the group of Asia’s richest man Gautam Adani and the short-selling firm comes as Adani Enterprises on Friday launched its offer to retail investors for its offering of secondary shares of 200 billion rupees (2.45 billion dollars).

The company last week set a floor price for the offer of 3,112 rupees per share, with a ceiling price of 3,276 rupees per share, according to a filing.

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Reuters reported that anchor investors, institutions that are allocated shares at a fixed price before the offering opens to the public, have made share offerings worth Rs 90 billion and the Malaysia’s Maybank was awarded over 34% of the shares reserved for institutional investors, while the Abu Dhabi Investment Authority took 2.56%.

Gautam Adani: The Rise and Rise of Asia's Richest Person

Since becoming a billionaire in 2008, Adani is now one of the richest people in the world, with a fortune of $113 billion, according to the Bloomberg Billionaires Index. His net worth has fallen by about $7 billion since the start of the year, according to the index.

In August last year, the company sought a hostile takeover of Indian media group NDTV, which in a filing said the move was «made without the consent» of its founders.

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