Adani vs Hindenburg: Adani Enterprises case reaches Supreme Court

The Adani Enterprises issue reached the Supreme Court of India after a public interest litigation was filed seeking an investigation against US-based firm Hindenburg Research, whose report led to a massive plunge in the value of Adani Group shares in the stock market. The plea has also been filed with market regulator Securities and Exchange Board of India (SEBI) to conduct a probe against the short seller and its associates for “exploiting and duping lakhs of innocent investors”.

Advocate ML Sharma, who filed the PIL, said that he has sought a probe against the US-based short-selling firm and its founder Nathan Anderson.

Sharma said the petition has claimed that short-seller Hindenburg Research “deliberately” released the report against the Adani Group just before its Rs 20,000-crore follow-on public offer (FPO). The corporation needs to be investigated for causing investor loss and levied a penalty, Sharma said.

Watch: Who Is Nate Anderson of Hindenburg Research, The Man Behind Adani Group Shares Rout?

He demanded that the short seller compensate those investors who incurred heavy losses in the stock market in the last six sessions.  

The shares of Adani Enterprises have crashed 76 per cent from their all-time high in December in just 31 trading sessions due to the scathing report, which accused the group of market manipulation and accounting fraud. The report said that the conglomerate is leading the “biggest con in corporate history”.

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The stock, which touched its all-time peak of Rs 4,189.55 on December 21, 2022, slipped to a 52-week low of Rs 1,017.10 on Friday, February 3, falling 75.72 per cent from its peak. Adani Enterprises has lost over Rs 2.88 lakh crore in market cap. On December 21, 2022, the market cap (at the close of trade) of the firm stood at Rs 4.45 lakh crore.

Hindenburg Research in its report accused the conglomerate of “brazen stock manipulation, money laundering, and accounting fraud scheme over the course of decades”. The short seller claimed that the report was summed up after a two-year investigation. Defending itself, the Adani Group called Hindenburg's report "maliciously mischievous and unresearched", which, it said, adversely affected the Adani Group, its shareholders, and investors.

In a 413-page response to the 106-page Hindenburg Research report, the ports-to-power conglomerate said: “This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity, and quality of Indian institutions, and the growth story and ambition of India.”

“It is tremendously concerning that the statements of an entity sitting thousands of miles away, with no credibility or ethics has caused serious and unprecedented adverse impact on our investors,” the Adani Group added.