The Adani group, in a sharp and focused response to Hindenburg Research’s report on its businesses, has responded to all 88 questions raised by Hindenburg including the young age of its auditors.

The research firm, in its report, raised concerns about shares of Adani group companies having a possibility of declining from their current levels, owing to high valuations. Hindenburg criticised the groups’ substantial debt, including pledging share loans and called out its auditors, saying they were not capable of complex audit work.

To which the group replied that Adani’s Portfolio has highly effective internal and audit controls and each of the listed companies has a solid governance structure.

In a 413-page response to the Hindenburg Research report on the Adani business interests, the Adani Group has attacked Hindenburg as “an unethical short seller”.

According to the statement, the Adani portfolio and the Adani verticals are focused on bringing India into the global economy and nation-building.

In the summary of the long response by Adani Group, it said the report was “nothing but a lie”.

The Adani report states that by “holding short positions” in Adani stocks, which, simply put, is betting on the stock falling.

Hindenburg exposed its hand as it made huge money with the fall of Adani stocks immediately following the publication of the report on January 24.

“The document is a malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations to drive an ulterior motive,” the Adani Group’s response said.

Adani Group, in its 413-page report, has also responded to all 88 questions raised by Hindenburg.

It went on to say the report by the US-based firm was 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”.

Earlier on Thursday, Adani Group said it was mulling legal options in the US and India against Hindenburg Research after its report accused firms owned by Gautam Adani of market manipulation and accounting fraud.

Jatin Jalundhwala, Group Head – Legal, Adani Group, in a statement, said, “The maliciously mischievous, unresearched report published by Hindenburg Research on 24 January 2023 has adversely affected the Adani Group, our shareholders and investors.”

“We (the Group) are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research,” Jalundhwala said.

“The volatility in Indian stock markets created by the report is of great concern and has led to unwanted anguish for Indian citizens,” the legal head said in a statement on Thursday.

Hindenburg, an US investment research firm published a report claiming that the Adani group had links with a labyrinth of off shore tax havens linked to Gautam Adani’s family and the firms exposure to high debt was a concern. The report also claimed that Adani group’s stock price was inflated and had significant downside risks.

On the report affecting Adani shares, Jatin Jalundhwala said, “Clearly, the 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 also mentioned Hindenburg, which said that it had taken “short positions in Adani Group Companies through US-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities.”

The Adani group’s legal head 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.”

The timing of the report by Hindenburg Research, Adani Group had said, “clearly betrays a brazen, mala fide intention to undermine” the Adani Group’s reputation with the “principal objective of damaging” the group’s Follow-on Public Offering from Adani Enterprises, the biggest FPO ever in India.

Earlier, on January 25, Jugeshinder Singh, the chief financial officer (CFO) of the Adani Group, on Wednesday said the conglomerate was ‘shocked’ about the Hindenburg Research’s report and termed it a “malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts”.

“We are shocked that Hindenburg Research published a report on January 24, 2023, without making any attempt to contact us or verify the factual matrix. The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts,” the CFO said in a statement.

The timing of the report by Hindenburg Research, the CFO, in his statement, said “clearly betrays a brazen, mala fide intention to undermine” the Adani Group’s reputation with the “principal objective of damaging” the upcoming Follow-on Public Offering from Adani Enterprises, the biggest FPO ever in India.

He went on to state that the investor community has always reposed faith in the Adani Group on the basis of detailed analysis and reports prepared by financial experts and leading national and international credit rating agencies.

“Our informed and knowledgeable investors are not influenced by one-sided, motivated and unsubstantiated reports with vested interests,” he added in the statement.

“The Adani Group, which is India’s leader in infrastructure and job creation, is a diverse portfolio of market-leading businesses managed by CEOs of the highest professional calibre and overseen by experts in various fields for several decades,” the CFO was quoted as saying further.

“The Group has always been in compliance with all laws, regardless of jurisdiction, and maintains the highest standards of corporate governance,” Singh added.

However, Hindenburg Research had said it fully stands by its report on Adani Group and believes any “legal action taken against us would be meritless”.

“Regarding the company’s threats of legal action, to be clear, we would welcome it. We fully stand by our report and believe any legal action taken against us would be meritless,” said Hindenburg Research in a statement that was posted on its official Twitter handle.