Adani group may sue Hindenburg for 'mischievous, mala fide' report

US firm stands by report, says will demand documents in legal battle

The Adani Group plans to sue US-based investment research firm Hindenburg Research for a “malafide and mischievous” report published before the Indian firm’s Rs 20,000 crore follow on public offer (FPO) pulled down company shares on Wednesday.

“We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research,” the group said in a statement.

Responding to Adani Group’s statement, Hindenburg said it stands by its report, adding that it has a long list of documents it will demand in a legal discovery process.

“In the 36 hours since we released our report, Adani hasn’t addressed a single substantive issue we raised,” Hindenburg Research said on Twitter. 

It further added, “If Adani is serious, it should also file suit in the US where we operate. We have a long list of documents we would demand in a legal discovery process.” 

The ports-to-power conglomerate had said that the “maliciously mischievous, unresearched” report affected the Adani Group, its shareholders and investors. 

“The volatility in Indian stock markets created by the report is of great concern and has led to unwanted anguish for Indian citizens. Clearly, the report and its unsubstantiated contents were designed to have a deleterious effect on the share values of Adani Group companies as Hindenburg Research, by their own admission, is positioned to benefit from a slide in Adani shares,” said Jatin Jalundhwala, Adani Group Head, Legal.

Hindenburg’s report admitted the firm holds short positions in Adani Group companies through US-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities.

“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 FPO (Follow-on Public Offering) from Adani Enterprises,” said the Adani statement.

The FPO of Adani Enterprises, the group flagship, opens on Friday and has received offers worth Rs 9,000 crore as against a quota of Rs 6,000 crore worth of shares for the anchor investors.

Abu Dhabi Investment Authority, Maybank Asia, Goldman Sachs, Nomura, Societe Generale, Jupiter, BNP Paribas, Al Mehwar, Citi group, Morgan Stanley participated in the issuance