Adani Group CFO says Hindenburg-led stock rout similar to Jallianwala Bagh massacre

The growth trajectory of the underlying businesses of Adani Group has not been affected by the Hindenburg Research report that sparked a $48 billion rout in its stocks, Chief Financial Officer Jugeshinder Singh said on Monday.

"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," the Adani Group said late on Sunday in a 413-page response to Hindenburg's allegations.

Singh likened the behaviour of Indian investors participating in the sell-off to the colonial-era Jallianwala Bagh massacre in Amritsar city.

On April 13, 1919, Gen. Reginald Dyer, a British officer ordered about 50 Indian army soldiers to shoot at unarmed civilians who were taking part in a peaceful protest. At least 379 people were killed, according to the official record, although local residents have said in the past the toll was far higher.

Hindenburg said in a statement on Monday that the Adani Group was trying to "lead the focus away from substantive issues and instead stoked a nationalist narrative".

"In short, the Adani Group has attempted to conflate its meteoric rise and the wealth of its chairman, Gautam Adani, with the success of India itself," it said.

"In Jallianwala Bagh, only one Englishman gave an order, and Indians fired on other Indians," Singh told the Mint business daily in an interview published on Monday, when asked why the market believed the Hindenburg report.

"So am I surprised by the behaviour of some fellow Indians? No."

'To be clear, we believe India is a vibrant democracy and an emerging superpower with an exciting future,'' it said. ''We also believe India's future is being held back by the Adani Group, which has draped itself in the Indian flag while systematically looting the nation.'' A ''fraud is fraud, even when it's perpetrated by one of the wealthiest individuals in the world,'' it said, adding, ''Adani also claimed we have committed a 'flagrant breach of applicable securities and foreign exchange laws'. Despite Adani's failure to identify any such laws, this is another serious accusation that we categorically deny.'' Adani's 413 page response only included about 30 pages focused on issues related to the report and the remainder consisted of 330 pages of court records, along with 53 pages of high-level financials, general information, and details on ''irrelevant'' corporate initiatives, such as how it encourages female entrepreneurship and the production of safe vegetables.

On Sunday evening, Adani group said the Hindenburg report was intended to enable the US-based short seller to book gains by crashing stock prices.

The report had come just as a Rs 20,000-crore share sale at the group's flagship company, Adani Enterprises, opened to anchor investors.

''All transactions entered into by us with entities who qualify as 'related parties' under Indian laws and accounting standards have been duly disclosed by us,'' it had said late on Sunday. ''This is rife with conflict of interest and intended only to create a false market in securities to enable Hindenburg, an admitted short seller, to book massive financial gain through wrongful means at the cost of countless investors.'' Hindenburg reiterated that it was short on the Adani group through US traded bonds and non-Indian-traded derivative instruments.

In the January 24 report, it had called out the conglomerate's ''substantial debt'', which includes pledging shares for loans; that Adani's brother Vinod ''manages a vast labyrinth of offshore shell entities'' that move billions into group companies without required disclosure; and that its auditor ''hardly seems capable of complex audit work''.

Hindenburg said it ''found Adani's lack of direct and transparent answers'' on the allegations of use of offshore entities ''telling''.

With inputs from agencies