'Fraud cannot be obfuscated by nationalism': Hindenburg's response to Adani

Hindenburg stood by its last week's report that said its two-year investigation found Adani Group "engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades".

New Delhi, Jan 30: Hindenburg Research on Monday hit back at Gautam Adani group saying fraud cannot be obfuscated by nationalism.

The US-based investment research firm said the Adani Group "predictably tried to lead the focus away from substantive issues and instead stoked a nationalist narrative."

Commenting on the 413-page response Adani Group, Hindenburg said it believed India was a vibrant democracy and an emerging superpower with an exciting future and it was Adani Group which was holding it back through "systematic loot".

Hindenburg stood by its last week's report that said its two-year investigation found Adani Group "engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades".

Hindenburg said the response by the conglomerate run by Asia's richest man Gautam Adani "opened with the sensationalistic claim that we are the 'Madoffs of Manhattan'."

Adani also claimed we have committed a "flagrant breach of applicable securities and foreign exchange laws."

"Despite Adani's failure to identify any such laws, this is another serious accusation that we categorically deny," it said.

Adani Group had on Sunday evening likened the damning allegations levied by Hindenburg to a "calculated attack" on India, its institutions and growth story, saying the allegations are "nothing but a lie".

It said the report was driven by "an ulterior motive" to "create a false market" to allow the US firm make financial gains by dragging stock prices down. The document is "a malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations to drive an ulterior motive."

"This is rife with conflict of interest and intended only to create a false market in securities to enable Hindenburg, an admitted short seller, to book massive financial gain through wrongful means at the cost of countless investors," it had said questioning the credibility and ethics of Hindenburg.

Hindenburg responded saying Adani Group "predictably tried to lead the focus away from substantive issues and instead stoked a nationalist narrative."

Hindenburg full statement

On January 24th, we released a report outlining numerous issues of suspected fraud at the Adani Group, the 2nd largest conglomerate in India run by the world's then-third richest man.

Hours ago, Adani released a '413-page response'. It opened with the sensationalistic claim that we are the "Madoffs of Manhattan".

Adani also claimed we have committed a "flagrant breach of applicable securities and foreign exchange laws." Despite Adani's failure to identify any such laws, this is another serious accusation that we categorically deny.

It also predictably tried to lead the focus away from substantive issues and instead stoked a nationalist narrative, claiming our report amounted to a "calculated attack on India." In short, the Adani Group has attempted to conflate its meteoric rise and the wealth of its Chairman, Gautam Adani, with the success of India itself.

We disagree. To be clear, we believe India is a vibrant democracy and an emerging superpower with an exciting future. We also believe India's future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation.

We also believe that fraud is fraud, even when it's perpetrated by one of the wealthiest individuals in the world.

In terms of substance, Adani's '413 page' response only included about 30 pages focused on issues related to our report.

The remainder of the response consisted of 330 pages of court records, along with 53 pages of high-level financials, general information, and details on irrelevant corporate initiatives, such as how it encourages female entrepreneurship and the production of safe vegetables.