Hindenburg report was an attack on Indian enterprise, says Gautam Adani

Gautam Adani, founder and chairman of the Adani Group, addressed the fallout from the Hindenburg report in a letter to shareholders, after earlier seeking a “national apology” from the US short-seller on social media.

In January 2023, US-based short seller Hindenburg Research published a report alleging stock manipulation and accounting fraud involving Adani and several group firms, including Adani Power and Adani Enterprises. The report precipitated a sharp fall in the shares of listed Adani companies, with some hitting lower circuit limits.

Adani calls report a challenge to Indian enterprise

“Hindenburg’s report was not merely a critique of your Adani Group. It was a direct challenge to the audacity of Indian enterprises to dream on a global scale," Adani wrote, saying Hindenburg's dossier marked the start of a test that examined every dimension of the group’s resilience.

“What was meant to weaken us has instead strengthened the very core of our foundations," he wrote, adding that January 24, 2023, will be remembered as a morning when India’s markets awoke to headlines that reverberated far beyond Dalal Street.

“What was intended to hurt us has instead become a defining inflection point by fortifying our foundations, sharpening our ambition and reaffirming our responsibility to build with scale, speed and resilience for India’s future," the chairman added in his letter.

Adani says cloud lifted

Earlier this week, Adani told staff in an internal message that uncertainty surrounding the probe has been lifted. “Today, a cloud that had hung over us for more than two years has been lifted," Adani said. “Sebi's comprehensive investigation has concluded by rejecting all allegations contained in the Hindenburg report from January 2023."

In its final orders, the Securities and Exchange Board of India (Sebi) said the inter-company transactions cited could not be classified as fraudulent, finding no siphoning of funds or diversion. The regulator noted that the sums had been returned with interest before the start of its investigation and that those transactions were not considered related-party dealings.

Sebi's investigation

Sebi launched an investigation covering the period from the financial year 2012-13 (FY13) to FY21 and issued show-cause notices to the individuals and companies named in the report on 15 January 2024. The scope of the probe included possible breaches of minimum public shareholding rules and stock-price manipulation. The group consistently denied the allegations, with promoters selling shares and repaying debt in efforts to stabilise the firms.

$150 billion wiped off value

The Hindenburg episode erased nearly $150 billion in market value from Adani’s listed companies and led to criticism of Sebi’s handling of the matter. The Supreme Court supervised the investigation and constituted an expert panel that included figures such as Nandan Nilekani, co-founder and chairman of Infosys, and KV Kamath, an independent director at Reliance Industries.