Adani Group: In response to a damning report by US short-seller Hindenburg Research, which indicated that US authorities are looking into the conglomerate’s claims to investors, shares of Adani Group fell sharply on Friday. According to Bloomberg’s sources, the US Attorney’s Office in Brooklyn, New York, has reportedly made enquiries to institutional investors with sizable holdings in Adani Group entities. The article emphasises that the inquiries are concentrated on the details of the information given to those investors by the Adani Group. According to additional reports, the Securities and Exchange Commission (SEC) is also looking into the conglomerate in a similar manner. The conglomerate’s flagship company, Adani Enterprises, first saw a fall of around 9% in early trade before making modest gains by noon. The majority of the other Adani Group stocks experienced declines of between 2 and 6 percent.
Adani Group Expresses Concern Over US Authorities’ Interest Amid Stock Plunge
Even though the request for information from US prosecutors does not necessarily indicate the filing of criminal or civil procedures, the Adani Group, which had mounted a strong comeback following Hindenburg Research’s report, finds the US authorities’ interest to be worrying. The Adani Group vehemently refuted the short seller’s accusations of ongoing stock manipulation and accounting fraud. Even nevertheless, the conglomerate saw a huge decline in the share prices of its publicly traded companies, which led to a $150 billion decline in market value. Despite some gains by the stocks, the aggregate market capitalization is still around $100 billion lower. An Adani Group representative addressed the issue and said the conglomerate was unaware of any subpoenas served on investors. The spokesperson also expressed confidence in the sufficiency and completeness of the disclosures as described in the pertinent issuer offering circulars.
Investors Divided as Adani Group Faces Allegations of Stock Manipulation and Regulatory Breaches
In a study published on January 24 by Hindenburg Research, the Adani Group was charged with using a network of offshore businesses located in tax havens to manipulate stock prices and financial outcomes. Additionally, it claimed that the group broke shareholding and disclosure regulations. The Adani Group responded by disputing the claims and calling the short-seller’s report “nothing short of a calculated securities fraud.” However, the Adani Group and its ten publicly traded firms took a significant hit as a result of the investigation. While some significant investors cut their holdings inside the group, others sold out their stakes. The US boutique business GQG Partners helped the Adani Group during a period of severe decline by investing in five Adani Group companies for a total of Rs 15,000 crore. Rajiv Jain, co-founder and chairman of GQG Partners, expressed optimism over the infrastructure assets of the conglomerate and reaffirmed the firm’s desire to take part in the organization’s next fundraising. Jain emphasised GQG’s ambition to overtake the family’s holding as the second-largest investor in the Adani Group within five years.
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