The Adani Group's back to back responses with strongly worded statements slamming the Hindenburg report as malicious have failed to stop its slide on the stock market. The bloodbath triggered by allegations of fraud have driven the market cap of Adani Group firms by as much as 20 per cent and wiped out more than Rs 3.4 lakh crore from its wealth. As Gautam Adani tumbled to the seventh position on Forbes' rich list, the firm has swung into damage control mode, releasing a detailed response to Hindenburg's 89 questions.
On Hindenburg's 89 questions
It has dismissed 21 of the questions, since they are based on disclosures in public documents from 2015 onwards, and can't be considered as the result of an investigation in the past two years. It also mentioned that these 21 queries are in relation to court cases, directorate of revenue intelligence and related party transactions, and didn't respond to them.
On accounting fraud
Adani further went on to add that six out of its nine listed entities have to submit filings for regulators as an obligation. Its revenue, claimed expenses and claimed capex are reviewed by independent regulators.
On credibility of audit
It further tried to establish credibility by mentioning that eight out of nine listed firms of the Adani Group, are audited by a firm which is part of the world's Big 6 auditors. This includes Ernst & Young as well as Deloitte Haskins & Sells, but it didn't comment on Shah Dhandharia, a little known firm with 11 employees and four partners, that audits Adani Enterprises and Adani Total Gas.
On ratings of its assets
Adani Group them lists AAA/Stable, AA+/Stable and A/Positive ratings given to its firms by Crisil, India Ratings, CARE, BWR and ICRA. It also claimed that Adani's growth was funded by India's largest equity program to de risk and de leverage its portfolio.
The response didn't contain any mention of a network of shell firms controlled by Gautam Adani's brother Vinod Adani. Hindenburg has alleged that these overseas firms are used by Adani to inflate prices of stocks, which are then pledged for loans.
