Adani shares continue to fall as legal action against Hindenburg is weighed

Adani shares continue to fall as legal action against Hindenburg is weighed
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Adani Group Chairman and Founder Gautam Adani at the News18 Rising India Summit on February 2nd. February 25, 2019 in New Delhi, India. Since becoming a billionaire in 2008, Adani is 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 posted sharp losses in India for the second consecutive day after the short-selling firm Hindenburg announced his short position in the conglomerate’s firms earlier this week.

In a detailed report released earlier this week, Hindenburg listed several allegations against the conglomerate’s companies and said the group had “engaged in a brazen stock manipulation and accounting fraud scheme over the decades.”

Adani denied the allegations in two separate statements, describing the short seller’s claims as “a willful and reckless attempt by a foreign company to mislead the investment community and the general public,” according to a media release.

“We are evaluating the relevant provisions of US and Indian law for remedial and punitive action against Hidenburg Research,” said Jatin Jalundhwala, Adani Group General Counsel.

Shares of Mumbai listed Adani company fell more than 9% in Friday’s Indian trading session. Adani transmission fell 19.47%, Adani Green Energy 19.89% lost and Adani power 5% lost. Adani portThe share price of also declined 13.8%.

The moves follow Wednesday’s losses after Hindenburg’s report was first released. The Indian Stock Exchange was closed on Thursday.

The short selling firm doubled down on its original stance following Adani’s replies, stressing that the conglomerate had not answered any of the questions raised, adding that any lawsuits filed against Hindenburg would be “baseless.”

“If Adani is serious, it should also file a lawsuit in the US, where we operate. We have a long list of documents that we would require in a legal investigation.”

“We fully stand by our report and believe that legal action against us would be pointless,” it said.

Billionaire investor and CEO of Pershing Square Capital Management, Bill Ackman, expressed his support for the short selling firm in a tweet published just before the Indian market opened.

“I found the Hindenburg report highly credible and extremely well researched,” he wrote, adding that the Adani Group’s response “speaks volumes.”

“Reservation emptor,” he added.

$2.5 billion stock offering

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Reuters reported that anchor investors, institutions to which shares will be allotted at a fixed price before the offering opens to the public, have submitted bids for shares worth Rs 90 billion; and that Malaysia’s Maybank has allotted more than 34% of the shares reserved for institutional investors while the Abu Dhabi Investment Authority rose 2.56%.

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

Since becoming a billionaire in 2008, Adani is now one of the richest people in the worldwith a fortune of $113 billion, according to the Bloomberg Billionaires Index. His net worth is down about $7 billion year to date, the index showed.

In August last year, the company was looking for a hostile takeover Indian media group NDTV, which said in a filing that the move had been carried out “without the consent” of its founders.

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