Current DevelopmentOn 27th January 2023, Gautam Adani came out vehemently against the allegations labeled by the Hindenburg Research LLC about its trade practices.. The Hindenburg Research had previously conducted a market research which found the Adani group engaging in unfair trade practices predominantly in the stock market. Let us read all about the report and its founder agency. What is Hindenburg Research LLC?Hindenburg Research is a New York based Company which conducts forensic financial investigations into the financial transactions of companies and specializes in research based on stock market speculations or betting by corporate houses. Founded in 2017, Hindenburg Research LLC is the brain-child of Nathan Anderson.
Adani Group Snaps Back on Allegations
The Charges Leveled against Adani Group by Hindenburg ResearchThe Hindenburg Research claimed that the Adani Group shares are highly over-valued which is an unfair trade practice. Major allegations of the report are as follows:
The Adani group has engaged in manipulation of the natural market forces which govern the stock market.
The Adani group has suddenly sold a large number of its shares as a pre-planned tactic and out of necessity.
The Adani group has “engaged in a brazen stock manipulation” which amounts to committing fraud.
The Hindenburg Research has also questioned the Adani group’s ownership of offshore companies as a means of tax evasion.
Response of The Adani GroupGautam Adani has snapped back to the allegations by calling them unfounded and not substantiated with evidence. He added that the Adani group has conducted business in full compliance with all the financial laws of the country. He 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.” Adani Group is contemplating legal action against the reporting agency.Response by Other PoliticiansJairam Ramesh responded to the issue by demanding a strict investigation by the SEBI and RBI into the charges leveled against the Adani group. Another politician from Shiv Sena, Priyanka Chaturvedi also demanded an elaborate inquiry. Many politicians have seen this issue as an opportunity to criticize the ruling party by alleging that the Adani group has succeeded due to Gautam Adani’s closeness with PM Narendra Modi.
Adani Group Snaps Back on Allegations-Adani Group Snaps Back on Allegations
Domestic Shareholder, LIC Crash Hits as Adani Group Stocks Fall One of the worst hit public sector undertakings due to Hindenburg Research LLC market report is LIC. It is the largest non-promoter domestic shareholder in five of the largest Adani Group businesses by market value. LIC's total investment in Adani Group stocks suffered a huge loss of of Rs 18,647 crore on Friday. In the meantime, LIC's stock price took a severe hit and dropped by 5.3%. However it is surprising to hear that the LIC is further planning to invest around Rs 300 Crore in Adani Group companies. Response of Landing Banks to the Report:Stata Bank of India and Bank of India have informed to Reuters that their exposure to this risk is within the admissible limit prescribed by Reserve Bank of India. Impact of Adani’s Carmichael Coal Mine ControversyA few transactions related to Adani's Carmichael coal mine operations were highlighted in the Hindenburg report, along with allegations that the company failed to inform investors of significant asset impairments. Due to the fossil fuel's role in greenhouse gas emissions, Adani's coal project attracted several controversies; yet the project moved forward after the Queensland Government approved a royalty agreement with Adani Group that allowed them to postpone payments. The Hindenburg report criticized Adani's actions and raised doubts about its authorization to conduct business in Australia.Whatever may be the outcome of this tussle between the two giants of their field what India saw on Wall Street on Black Friday was a blood-bath of investors’ money and sharp decline in the value of shares of Adani is ulitmately going to affect the PSUs which in turn will have a lasting impact on the financial health of the public exchequer.For more updates keep visiting our website www.topstoriesworld.com where we provide unbiased, true and top stories of the world.