Adani Mulls Suit vs Short-Seller For Causing 20% Fall In Stock Value

India’s Adani Group launched a share offering for retail investors Friday as it mulled taking legal action against US-based short-selling firm Hindenburg Research over a report that led investors to dump its shares, with some stocks in the group falling up to 20%, the Associated Press (AP) reported.

Photo Insert: Hindenburg’s report prompted selloffs on Wednesday and Friday that have wiped out tens of billions of dollars worth of the Adani Group's market value.

The market value of Adani’s companies has soared in recent years, one of the reasons Hindenburg said it judged the seven key Adani listed companies to have an “85% downside, purely on a fundamental basis owing to sky-high valuations.”

Its report, “Adani Group: How the World’s 3rd Richest Man is Pulling the Largest Con in Corporate History,” said Hindenburg was betting against shares in companies within the Adani empire, founded by Asia’s richest man, coal magnate Gautam Adani.

Hindenburg’s report prompted selloffs on Wednesday and Friday that have wiped out tens of billions of dollars’ worth of market value.

Markets in India were closed on Thursday for a holiday. Jatin Jalundhwala, head of the Adani group’s legal department, said late Thursday that the group “was evaluating the relevant provisions under US and Indian laws for remedial action against Hindenburg Research.”

``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 said.

He said the allegations were an attempt by Hindenburg to sabotage Adani’s share offering, which is expected to raise about $2.4 billion.

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