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Adani shares fall further as it weighs legal action against Hindenburg




Chairman and Founder of Adani Group, Gautam Adani, at the News18 Rising India Summit on February 25, 2019 in New Delhi, India. Since becoming a billionaire in 2008, Adani is now one of the richest people in the world, with a fortune of $113 billion, according to the Bloomberg Billionaires Index.

Hindustan Times | Hindustan Times | Getty Images

Shares of Adani Group companies continued to see heavy losses for the second consecutive trading session in India, after short selling firm Hindenburg announced its short position in the conglomerate̵[ads1]7;s firms earlier this week.

In a lengthy report released earlier this week, Hindenburg detailed several allegations against the conglomerate’s companies, saying the group has “engaged in a brazen stock manipulation and accounting fraud scheme over decades.”

Adani denied the allegations in two separate statements, describing the short-seller’s claims as a “deliberate and reckless attempt by a foreign entity to mislead the investor community and the public,” according to a media release.

“We are considering the relevant provisions under US and Indian laws for remedial and punitive actions against Hidenburg Research,” said Adani Group Legal Director, Jatin Jalundhwala.

Mumbai-listed shares of Adani Enterprises fell more than 9% in Indian trade on Friday. Adani transfer fell 19.47%, Adani Green Energy decreased 19.89% and Adani Power lost 5%. Adani Port’s share price also fell 13.8%.

The moves follow Wednesday’s loss following the initial release of Hindenburg’s report. India’s stock exchanges were closed on Thursday.

The short-selling firm doubled down on its original stance after Adani’s response, stressing that the conglomerate has not answered any of the questions raised, and adding that any lawsuits against Hindenburg would be “meritless.”

“If Adani is serious, it should also file suit in the US where we operate. We have a long list of documents we would require in a legal discovery process,” it said.

“We fully stand by our report and believe that any legal action against us will be worthless,” it said.

Billionaire investor and Pershing Square Capital Management CEO Bill Ackman voiced his support for the short-selling firm in a tweet posted shortly before India’s market opened.

“I found the Hindenburg report very credible and extremely well researched,” he wrote, adding that the Adani Group’s response “speaks BokmÃ¥l.”

“Caveat emptor,” he added.

share issue of 2.5 billion dollars

The latest back-and-forth between Asia’s richest man Gautam Adani’s group and the short-selling firm comes as Adani Enterprises began bidding for retail investors for its 200 billion rupee ($2.45 billion) secondary stock offering on Friday.

The firm last week set a floor price for the offer at 3,112 rupees per share, with a price ceiling of 3,276 rupees per share, according to a filing.

Stock picks and investment trends from CNBC Pro:

Reuters reported that anchor investors, institutions that are allocated shares at a fixed price before the offering opens to the public, bid for shares worth 90 billion rupiah and that Malaysia’s Maybank was awarded more than 34% of the shares reserved for institutional investors, while Abu Dhabi Investment Authority took up 2.56%.

Adani shares fall further as it weighs legal action against Hindenburg

Since becoming a billionaire in 2008, Adani is now one of the richest people in the world, with a fortune of $113 billion, according to the Bloomberg Billionaires Index. His net worth fell about $7 billion so far this year, the index showed.

Last August, the company sought a hostile takeover by Indian media group NDTV, which said in a filing that the move was “executed without the consent” of its founders.



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