Adani Group official says stock con allegations like ‘colonial era massacre’ after $72bn rout

Jugeshinder Singh, the chief finance officer (CFO) of India’s Adani Group, has compared the conglomerate’s stocks rout after US-based Hindenburg Research’s damning report with one of India’s worst British colonial era massacre.

Mr Singh compared the behaviour of Indian investors participating in the sell-off to the Jallianwala Bagh massacre that took place in Amritsar city in Punjab in 1919.

After the US-based short seller’s investigation titled “Adani Group: How the World’s 3rd Richest Man is Pulling the Largest Con in Corporate History” was published, investors began dumping Adani-linked shares, wiping out some $72bn in market value so far.

In an interview with the Indian business daily Mint, Mr Singh was asked why the market believed the Hindenburg report. He responded: “In Jallianwala Bagh, only one Englishman gave an order, and Indians fired on other Indians. So am I surprised by the behaviour of some fellow Indians? No.”

At least 379 people were killed in the Jallianwala Bagh massacre, according to official records. But locals claim the toll was far higher.

The conglomerate issued a rebuttal, calling the short seller’s report “malicious”, “baseless” and full of “selective misinformation”. Hindenburg accused the Adani group of engaging in “brazen” stock manipulation and accounting fraud.

“We have uncovered evidence of brazen accounting fraud, stock manipulation and money laundering at Adani, taking place over the course of decades. Adani has pulled off this gargantuan feat with the help of enablers in government and a cottage industry of international companies that facilitate these activities,” the report said.

Adani Group said it was considering “remedial and punitive” legal action against Hindenburg Research.

Adani’s 400-page rebuttal issued late Sunday accused Hindenburg of attacking India and its institutions and of breaking securities and foreign exchange laws. Adani Group also accused Hindenburg of trying to derail a share sale originally expected to bring in about $2.5bn.

The group said it had complied with all laws and made the necessary regulatory disclosures. “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 said in a statement.

“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,” Adani’s statement added.

Hindenburg, in response, denied the accusations and said that Adani Group’s response failed to address key questions and attempted to “conflate its meteoric rise and the wealth of its chairman … with the success of India itself”.

Hindenburg said that Adani Group was trying to “lead the focus away from substantive issues and instead stoked a nationalist narrative”.

It added: “We believe India is a vibrant democracy and emerging superpower with an exciting future. 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. We also believe that fraud is fraud, even when it’s perpetrated by one of the wealthiest individuals in the world.”

On Sunday, the standoff between Hindenburg and Adani Group continued with Adani claiming that the US short sellers were the “Madoffs of Manhattan” – referring to American fraudster and financier Bernard Lawrence Madoff, the mastermind of the largest Ponzi scheme in history.

Hindenburg retorted: “Adani seems unaware that Madoff lived in Manhattan, so he was quite literally his own Madoff of Manhattan.”

“In terms of substance, Adani’s ‘413 page’ response only included about 30 pages focused on issues related to our report,” Hindenburg continued in its statement. “The remainder of the response 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.”

Billionaire US investor Bill Ackman said on Thursday that he found Hindenburg Research’s report on Adani Group “highly credible and extremely well researched”.

Hindenburg Research has said that it stands by its investigation and welcomes any legal action.