Hindenburg report: Australian securities regulator ASIC reviewing allegations against Adani Group
1 min read . Updated: 01 Feb 2023, 12:39 PM IST
Premium‘ASIC will review the allegations against Adani and determine whether further inquiries are warranted,’ said a spokesman.
Hindenburg Research's report accusing the Adani Group of improperly using offshore tax havens is being examined by the Australian Securities & Investments Commission (ASIC) to see whether any regulatory action is necessary, The Sydney Morning Herald reported. Last week, the short-seller based out of the US raised red flags regarding the Indian conglomerate, including its excessive debt levels, which led to a $65 billion decline in the value of the company's stock.
"ASIC will review the allegations against Adani and determine whether further inquiries are warranted," a spokesperson for Australia's corporate regulator told Reuters on February 1.
The Adani conglomerate runs the Carmichael coal mine and the North Queensland Export Terminal port in Abbot Point in Australia.
In the report and a subsequent statement, Nate Anderson - the founder of Hindenburg - accused Adani of failing to disclose related-party transactions and the source of funds for suspicious transactions between the Adani Group entities founded by Gautam Adani and those connected to his brother Vinod Adani.
“This information is critical to the integrity of Adani’s business, as it indicates whether the company is round-tripping turnover, laundering illicit funds, or using cash to manipulate its stock," Anderson wrote.
In a statement, the Adani Group said that the Hindenburg report shows transactions with Adani's Australian firms in a “misleading" manner with the explicit intent of damaging the Adani Group's reputation in order to make money by shorting shares of Adani Group companies.
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"All our businesses are Australian companies that comply with Australian corporations and securities legislation," the statement said.
On January 31, despite minimal interest from individual investors, a critical $2.5 billion share offering for the Adani Group was completely subscribed with involvement from overseas institutional investors and corporate funds.
Only two of the 20-odd companies Hindenburg has targeted in research reports since 2017 have actually sued it for defamation. According to Reuters, both of those lawsuits—one from the Chinese real estate company Yangtze River Port and Logistics and the other from the Bollywood film studio Eros International—were dismissed in 2019. The report comes as Adani is reportedly considering suing Hindenburg in the US.
(With agency inputs)
