Adani Group Chairman Gautam Adani on Tuesday once again slammed the US-based short seller Hindenburg Research report terming it was a combination of targeted misinformation and discredited allegations.
Addressing the company’s 31 st Annual General Meeting (AGM) 2023 today, Adani told investors that in January this year the US-based group had published a report to short the company’s stocks just as they were planning to launch the largest Follow-on Public Offering in India’s history. “The report was a combination of targeted misinformation and discredited allegations, the majority of them dating from 2004 to 2015. They were all settled by the appropriate authorities at that time. This report was a deliberate and malicious attempt aimed at damaging our reputation and generating profits through a short-term drive-down of our stock prices,” Adani said in a video message.
“Subsequently, despite a fully subscribed FPO, we decided to withdraw and return the money to our investors to protect their interests. While we promptly issued a comprehensive rebuttal, various vested interests tried to exploit the claims made by the short seller. These entities encouraged and promoted false narratives across various news and social media platforms,” the industrialist said.
The Hindenburg report, which came out this January 24, alleged stock manipulation and fraud, among other charges, by the conglomerate.
The Adani Group had then termed Hindenburg as “an unethical short seller”, stating that the report by the New York-based entity was “nothing but a lie”. A short-seller in the securities market books seeks to gain from the subsequent reduction in the prices of shares.
SEBI and a Supreme Court-appointed expert committee were tasked to probe the matter. The SC committee had made its report public in May this year.
Addressing shareholders today, Adani said that the apex court-appointed expert committee’s report helped rebuild confidence in the Adani group.
“The (SC-constituted) expert committee did not find any regulatory failure. The committee’s report not only observed that the mitigating measures undertaken by your company (Adani Group) helped rebuilt confidence but also cited that there were credible charges of targetted destablisation of Indian markets,” Gautam Adani told investors at the AGM.
“It also confirmed the quality of our Group’s disclosures and found no instance of any breach. While SEBI is still to submit its report we are confident of our governance and disclosure standards. It is my committment that we will continue to strive to keep improving this every single day. Our track record speaks for itself.”
Supreme Court-appointed expert committee constituted to look into the Adani-Hindenburg row, in May, had said it would not be possible for it to conclude that there has been a regulatory failure around the allegation of price manipulation in stocks.
“At this stage, taking into account the explanations provided by SEBI, supported by empirical data, prima facie, it would not be possible for the Committee to conclude that there has been a regulatory failure around the allegation of price manipulation,” the expert committee had said in its report submitted to the apex court.
On March 2, Supreme Court set up an expert committee on the issue arising from the Hindenburg Research report on Adani Group companies. The committee was headed by former apex court judge Justice AM Sapre. The top court had then asked SEBI to file a status report within two months.
Referring to the then volatility in the stocks and stating the interest of the investors as paramount and to insulate them from any potential financial losses, the Board had decided not to go ahead with the fully-subscribed FPO. A follow-on public offering (FPO) is the issuance of shares to investors by a company listed on a stock exchange after its initial public offerings.
Adani Enterprises had filed a red herring prospectus with the markets regulator Securities and Exchange Board of India (SEBI) for the Rs 20,000 crore follow-on public offer (FPO), the largest ever in India.
Meanwhile, Gautam Adani also told stakeholders in his address today that even after the Hindenburg episode, the group continued to raise several billions from global investors and pointed out that no rating agencies, both in India or abroad, have cut its ratings.
The industrialist also extolled the growth prospects for India.
“While economic cycles are getting increasingly hard to forecast, there is little doubt that, India – already the world’s 5th largest economy – will become the world’s 3rd largest economy well before 2030 and, thereafter, the world’s second largest economy by 2050,” Adani said.
“Following our independence, it took us 58 years to get to our first trillion dollars of GDP, 12 years to get to the next trillion and just 5 years for the third trillion. I anticipate that within the next decade, India will start adding a trillion dollars to its GDP every 18 months. This puts us on track to be a 25 to 30 trillion-dollar economy by 2050 and will drive India’s stock market capitalization to over 40 trillion dollars – approximately a10X expansion from current levels,” he said.