Adani Group on Thursday said it is evaluating legal action against Hindenburg Research, the US-based short-seller which on January 24, released a report alleging Adani Group of stock manipulation and fraud that led to a sharp fall in the company’s shares.
The Adani Group stated that the research firm had admitted its short positions in Adani shares and was positioned to benefit from a slide in Adani shares, which lost about ₹46,000 crore in market valuation on Wednesday after the release of the report.
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“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. We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research,” Jatin Jalundhwala, Group Head – Legal, Adani Group said in a statement.
The research firm had given a disclosure with its report stating, “We hold short positions in Adani Group Companies through U.S.-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities.”
The panic and negative sentiment around Adani Group stocks spilt over to the broader market and the benchmark index, Sensex lost 1.27 per cent or 773 points to end at 60,205 while Nifty fell 1.25 per cent or 226 points to close at 17,891 on Wednesday.
“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,” the Adani Group statement added.
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“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,” it said, terming the report “maliciously mischievous, unresearched” that adversely affected the Adani Group, its shareholders and investors.