'If Adani is serious...': Hindenburg dares Adani Group to file legal suit in US

Hindenburg Research on Thursday said that it will demand documents in the legal discovery process if Adani Group files a lawsuit in the United States against the short seller for its report on the ports-to-power conglomerate. In a report, which was released on Wednesday, the research firm has accused the conglomerate of improper use of offshore tax havens. "If Adani is serious, it should also file suit in the US where we operate. We have a long list of documents we would demand in a legal discovery process," said Hindenburg in its statement published on Twitter.

"We fully stand by our report, any action against us will be meritless," Hindenburg Research added after  Adani Group said it was evaluating "remedial and punitive action" against the short seller.

The US-based short-seller on Thursday said that the Adani Group has failed to raise any substantive issue it has noted in its report in the last 36 hours. The report accused the conglomerate of money laundering and siphoning off of funds. 

"In the 36 hours since we released our report, Adani hasn't addressed a single substantive issue we raised," Hindenburg Research said on Twitter. "At the conclusion of our report, we asked 88 straightforward questions that we believe give the company a chance to be transparent. Thus far, Adani has answered none of these questions." 

Hindenburg Research, which has a track record of unearthing corporate wrongdoings and placing bets against the companies, in a tweet on Thursday evening said that the report has asked 88 “straightforward questions” from the Adani Group, which gives it a fair chance to come clean.  

It said that the conglomerate hasn’t answered any of its observations. It noted that the conglomerate has "resorted to blusters and threats" instead of replying to its claims. 

The research group said that Adani has in its statements referred to its 106-page, 32,000-word report, with over 720 citations and prepared over the course of 2 years, as "unresearched", whereas it has not mentioned a single point where the report has gone wrong.

On Thursday morning, Adani Group, in an official statement, said that its shareholders and investors were adversely impacted by the Hindenburg controversial report that alleged that the conglomerate was engaged in accounting fraud and stock manipulation for decades.

Adani Group said on Thursday it is evaluating "remedial and punitive action" under US and Indian laws.

In a statement to stocks exchanges, Adani Group head of legal, Jatin Jalundhwala, called the Hindenburg report "maliciously mischievous, (and) unresearched".

Earlier, Hindenburg, founded by Nathan Anderson in 2017, said it holds short positions in Adani Group companies through US-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities. 

It said it stands to realise significant gains in the event that the price of any security it covered declines. "Following publication of any report or letter, we intend to continue transacting in the securities covered herein, and we may be long, short, or neutral at any time hereafter regardless of our initial conclusions, or opinions," it said. 

Adani group on Wednesday said that the Hindenburg 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”.

Jalundhwala said: “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.”