“Adani’s response to Hindenburg Research was similar to Herbalife’s response to our original 350-page presentation,” Ackman said, referring to a painful short-selling campaign that lasted more than five years against the weight-loss shake seller before exiting. his position at Herbalife Nutrition Ltd. in 2018.
Adani Group representatives did not immediately respond to an emailed request for comment on Ackman’s Twitter post. Ackman said in separate Twitter post whether he is not “long or short” in the Adani company or does independent research.
Adani Group, led by billionaire Gautam Adani – the fourth richest man in the world – said it was exploring legal action against Hindenburg Research. The port-to-power conglomerate also called the January 24 report “maliciously mischievous,” “bogus” and “unresearched.”
Hindenburg, which was founded by Nate Anderson, published a report earlier this week that said it was shorting U.S. trading bonds and non-Indian derivatives conglomerate Adani. It accused the group of “brazen” market manipulation and accounting fraud.
The widespread allegations of corporate malpractice are believed to be the websites of offshore shell entities controlled by the Adani family in tax havens, from the Caribbean, Mauritius and the United Arab Emirates.
Hindenburg claimed it was used to facilitate corruption, money laundering and theft of taxpayers, while siphoning money from the group’s registered companies. The comglomerate has businesses ranging from ports to power plants to airports, data centers, renewable energy, cement producers and media.
The fall in market prices continued on Friday for Adani-listed companies. The report came out on Wednesday – a particularly sensitive day for short-selling attacks since flagship company Adani Enterprises Ltd. opened a $2.5 billion stock sale to institutional investors. The anchor book of the follow-up offer is oversubscribed.
The sale, which continues to be open for subscription through January 31, is part of the tycoon’s efforts to gain global credibility for his fast-growing empire. Adani is also looking to attract India’s mom and pop investors to expand its shareholder base. This will help silence critics who point to thinly traded stocks and rising debt.
The highest standards
The short seller’s attack on the Adani conglomerate shows a global danger for the self-made billionaire as he and his aides increasingly hold the highest standards of corporate governance.
This level of scrutiny is also something Adani has been able to avoid in his home country, where he often faces criticism of his influence and high politics due to his closeness to Indian Prime Minister Narendra Modi.
No past challenges have hindered his meteoric rise. The Hindenburg – a relatively small short seller but one with a history of taking down companies like electric vehicle maker Nikola Corp. – Adani has also run into the toughest opponent so far.
“Regarding the threat of legal action by the company, to be clear, we welcome it,” said the research company in a Twitter posts on Wednesday, adding that there were reports. “If Adani is serious, it should also file a lawsuit in the US where we operate. We have a long list of documents that we will expect in the legal process.
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