Gautam Adani’s flagship company Adani Enterprises came out with a FPO (Follow On Public Issue) and was to raise 20,000 Crores from the Indian Public. But just before the issue, an equity research firm based in US, Hindenburg Research, put out a report saying that Adani was pulling off the biggest con in corporate history of the world.
This 88 page report, researched using publicly available documents and data, showed how Adani and his family members had rigged the prices of his equity shares in the seven listed companies right under the nose of SEBI and NSE/BSE. Hit by this allegation, Adani group put out a 413 page rebuttal but markets reacted negatively to the news.
The result was that Adani group suffered a market capitalization loss of 150 Billion USD, in terms of Indian Rupees, they lost 12,00,000 Crores in value.
Right at the very outset, Adani Group told the media that it is considering taking Hindenburg Research to court. But even after the lapse of one and half months since the damning report was put out, it has failed to file a case against the research organization.
On the other hand, a clutch of PIL’s have been filed in the Indian Supreme Court asking for protection of Adani Group and a bar on Hindenburg.
Markets have continued to punish Adani Group although the public share holding in his companies is less than 4% in most cases.
There have been leaked reports that Adani Group has secured 3 Billion USD or 1.8 Billion USD from other sources but these have failed to lift the sentiment.
The 20,000 Crore FPO meanwhile failed to find buyers for its retail section, in the end some high net worth individuals including Mukesh Ambani, Sunil Mittal, etc. bought the unsold portion. Later the company had to scrap the issue and has promised to return the money of those who had subscribed to the shares.
The question that nobody seems to be asking is why is the Adani Group fighting shy of taking Hindenburg Research to court? Is it because if they do it all the skeletons will come tumbling out of the cupboard? As per US laws, if Hindenburg Research is taken to court, they will ask for documents from the company to prove their allegations and unfortunately the US Courts don’t work on the sealed envelope system!
