Fraud can not be obfuscated by nationalism: Hindenburg on Adani's rebuttal

The US-based short seller said that the Adani Group 'tried to lead the focus away from substantive issues and instead stoked a nationalist narrative'

In reply to Adani Group's 413-page rebuttal of Hindenburg Research's January 24 report, the US-based research firm on Monday said that the "fraud cannot be obfuscated by nationalism or a bloated response that ignores every key allegation". It said that the group "tried to lead the focus away from substantive issues and instead stoked a nationalist narrative".

On Sunday, Adani Group replied to Hindenburg's allegations of malpractice by stating that the report was driven by "an ulterior motive" to "create a false market" to allow the US firm to make financial gains. The report has, to date, led to Adani stocks suffering a $48 billion rout.

"This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India," it said. It also said that the answers to 65 of the 88 questions raised in the report are "already in public domain". 

"Of the balance 23 questions, 18 relate to public shareholders and third parties (and not the Adani portfolio companies), while the balance 5 are baseless allegations based on imaginary fact patterns," it added. 

In reply, Hindenburg said, "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".

It added that the group failed to "specifically answer 62 of or 88 questions". 

"Many of our questions were focused on both the nature of these transactions and the lack of disclosure around the clear conflicts of interest involved...In its response, Adani did not seem to dispute the existence of these transactions and made no effort to explain their obvious irregularities," the reply said. 

It concluded that the group's response "largely confirmed" the findings.