The Adani Group, a conglomerate of Indian companies with interests in energy, resources and logistics, has come under scrutiny from Hindenburg Research, a US-based financial research firm. In a report published on Tuesday, Hindenburg alleged that the Adani Group has inflated profits and assets, and concealed debt to appear financially stronger than it actually is.
According to Hindenburg, the Adani Group’s revenue and net income figures have been inflated by overstating the value of its power plants, and by shifting debt from its publicly-listed companies to its privately-held subsidiaries. The firm also alleged that the Adani Group has used accounting tricks to make its debt appear lower than it actually is, and that the company has a history of failing to disclose important information to its investors.
Hindenburg also raised concerns about the group’s Australian operations, specifically the Carmichael coal mine project in Queensland. The project has been plagued by delays and legal challenges, and Hindenburg argues that the Adani Group has not been transparent about the financial risks associated with the mine. The report also claims that the Adani Group has been involved in a number of questionable transactions, including the sale of an Indian port to a company owned by the Adani family.
In response to the report, the Adani Group issued a statement denying the allegations, calling them “baseless and malicious”. The company stated that its financials are audited by “leading global firms”, and that it is committed to “transparency and good corporate governance”. The Adani Group also said that it will take legal action against Hindenburg Research for “defamation and malicious intent”.
The Hindenburg report is not the first time the Adani Group has faced accusations of financial impropriety. In 2015, the Australian Securities and Investments Commission (ASIC) began an investigation into the group’s Australian operations, but the case was later dropped. However, the report has reignited concerns about the Adani Group’s financial practices, and is likely to put pressure on the company to provide more transparency about its operations and finances.
The Adani Group is a major player in the Indian economy, with interests in energy, resources and logistics. The company is best known for its controversial Carmichael coal mine project in Queensland, Australia, which has faced delays and legal challenges due to concerns about its environmental impact. The project has also been criticised for its potential financial risks, and Hindenburg Research has now added to these concerns with its latest report.
The report, which was published on Tuesday, alleges that the Adani Group has inflated profits and assets, and concealed debt in order to appear financially stronger than it actually is. According to Hindenburg, the Adani Group’s revenue and net income figures have been inflated by overstating the value of its power plants, and by shifting debt from its publicly-listed companies to its privately-held subsidiaries.
Hindenburg says It Would ‘Welcome’ Legal Action From Adani Group
Hindenburg Research stated that if Adani Group files a lawsuit against them in the US for their report on the Indian conglomerate, they will request documents in the legal discovery process. They confirmed that they fully stand by their report and any legal action taken against them would be without merit.
The US-based short seller also mentioned that they would welcome any legal action from Adani Group as they have not addressed any of the substantive issues raised in their report. Hindenburg Research added that they had asked 88 straightforward questions at the conclusion of their report in order to give Adani Group the opportunity to be transparent, but thus far, the company has not answered any of these questions.
They also mentioned that if Adani Group is serious about legal action, they should also file a lawsuit in the US where Hindenburg Research operates as they have a long list of documents they would demand in a legal discovery process.