Tag: Hindenburg

Auditor named in Hindenburg report resigns from Adani company

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New Delhi: A small Ahmedabad-based chartered accountancy firm, whose appointment was questioned by a US short seller in its scathing report against the conglomerate run by billionaire Gautam Adani, has resigned due to “pre-occupation”, Adani Total Gas Ltd said.
Hindenburg Research in its January 24 report that levelled allegations of fraud, stock manipulation and money laundering against the Adani group, had also raised the issue of the size and capability of the firms auditing the conglomerate.
Adani group has repeatedly denied all allegations.

Hindenburg stated that the independent auditor for the group’s flagship firm, Adani Enterprises, and its city gas retailer Adani Total Gas Ltd is a “tiny firm” called Shah Dhandharia.
“Shah Dhandharia seems to have no current website. Historical archives of its website show that it had only 4 partners and 11 employees. Records show it pays Rs 32,000 (USD 435 in 2021) in monthly office rent. The only other listed entity we found that it audits has a market capitalization of about Rs 640 million (USD 7.8 million),” it had stated.
In a stock exchange filing, Adani Total Gas Ltd said, “We wish to inform that M/s. Shah Dhandharia & Co. LLP, Chartered Accountants, have resigned as the statutory auditors of the company i.e., Adani Total Gas Limited (ATGL) with effect from May 2, 2023.”
It attached the May 2, 2023 resignation letter from the auditor.
In the letter, the auditor said it was given a second term of 5 years on July 26, 2022, and has completed the audit of the company for the financial year ended March 31, 2023.

“We have carefully evaluated and due to increased professional pre-occupation in other assignment, we regrettably propose our resignation,” it said.
“Our resignation does not result from an inability to obtain sufficient appropriate audit evidence,” it added.
It went on to state, “There are no other circumstances connected with our resignation which we consider should be brought to the notice of the Board.”
“In view of the above and as discussed and agreed with the management, we express our inability to continue as the statutory auditors for the company. Please accept our resignation with immediate effect,” it said.
It is not known if the chartered accountancy firm would also step down at Adani Enterprises. The board of directors of the group’s flagship, which houses businesses such as airports and data centres, is due to meet on May 4 to consider its financial results.
The Adani Group has been under siege since allegations of fraud, corruption, stock manipulation and money laundering were levelled by Hindenburg. The US short seller also charged the group with using a vast network of shell companies in opaque financial transactions.
The report led to at one stage wiping out almost USD 140 billion of the Adani group’s market capitalisation.
Adani group has denied all allegations.
Hindenburg had questioned the Adani group’s decision to give such a big audit mandate to a virtually unknown firm and claimed that the audit partner who signed off on ATGL audits was only 23 years old when he was first appointed.
It also claimed that the audit partner at Shah Dhandharia who signed off on the audits of Adani Enterprises was only 24 years old when he started. Both are now just 28 years old.
Shubham Rohatgi, who signed off the ATGL’s audit for the 2022-23 fiscal on May 2, 2023, on behalf of Shah Dhandharia & Co LLP was also red-flagged by proxy advisory firm Institutional Investor Advisory Services (IiAS) in July 2022.
Advising shareholders of four Adani group firms to vote against a number of resolutions including the reappointment of Gautam Adani as managing director of Adani Ports & Special Economic Zone (APSEZ), IiAS had stated that Rohatgi did not have “the requisite experience to audit” a top company.
“We raise concerns over the quality of the audit conducted since the signing partner of FY22 – Shubham Rohatgi – became an associate member of ICAI (Institute of Chartered Accountants of India) in 2018. We believe he does not have the requisite experience to audit the financial statements of a NIFTY 100 company,” it had said.
While rebutting the Hindenburg charges, the Adani group had on January 29 stated that it followed a “stated policy of having the global Big Six or regional leaders as statutory auditors”.
The reference was to Arthur Andersen, Coopers & Lybrand, Deloitte and Touche, Ernst & Young, KPMG and Price Waterhouse. They have since telescoped into the Big 4 with the creation of PricewaterhouseCoopers in 1998 following a merger and the collapse of Arthur Andersen in 2002 after the Enron scandal.
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( With inputs from www.siasat.com )

May 3, 2023
Gautam Adani meets Sharad Pawar in Mumbai row over Hindenburg report

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Mumbai: Industrialist Gautam Adani met NCP chief Sharad Pawar at the latter’s residence in Mumbai on Thursday, party sources said.
The meeting follows Pawar’s recent statement that he is not opposed to a Joint Parliamentary Committee probe into the charges made by Hindenburg Research against the Adani group, but a Supreme Court committee will be more useful and effective.
Hindenburg has alleged stock manipulation and accounting fraud in firms belonging to billionaire Adani.

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#Gautam #Adani #meets #Sharad #Pawar #Mumbai #row #Hindenburg #report
( With inputs from www.siasat.com )

April 20, 2023
LIC increases holdings in Adani stocks despite Hindenburg controversy

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Life Insurance Corporation of India (LIC), one of the investors in the Indian stock market, has increased its stake in four Adani Group companies despite the Hindenburg controversy that dragged down Adani stock prices.
In the March quarter, LIC acquired 357,500 shares of Adani Enterprises, thereby increasing its share in the company from 4.23 percent in the previous quarter to 4.26 percent. The PSU insurer also raised its stakes in Adani Transmission (from 3.65 percent to 3.68 percent), Adani Green (from 1.28 percent to 1.36 percent), and Adani Total Gas (from 5.96 percent to 6.02 percent) during the quarter.
However, LIC reduced its stake in Adani Ports and Ambuja Cements. There was no change in LIC’s stake in ACC. It is not clear whether the share transactions took place before or after the release of the Hindenburg report.

Small retail investors showing trust in Adani Enterprises stocks
While some institutional investors are reducing their exposure to Adani stocks, small retail investors are showing trust in Adani Enterprises. The percentage of the company’s shares held by them increased from 1.86 percent to 3.41 percent.
On the other hand, the number of mutual funds investing in Adani Group companies has decreased from 31 to 27. The mutual funds’ investment in the Adani company also reduced.
Amid controversy, Adani Group has struck a deal worth Rs 15,000 crore with US-based GQG Partners. Adani Enterprises is one of the four companies in which the promoters have pared their stake.
Adani’s net worth increases
As of today, six Adani Group companies were trading in the green, with Adani Enterprises’ share price increasing by 2.10 percent.
Gautam Adani, whose net worth dipped significantly over the past month, has begun to climb up again, making him one of the top 25 richest persons in the world’s billionaire list following the surge in stock values.

The businessman, who recently slipped out of the world’s top 35 billionaires list, is slowly climbing up in the rankings.
With a current net worth of USD 47.1 billion, he is in the 24th position on the list.
Following LIC’s increased stake in Adani Group companies, Congress President Mallikarjun Kharge started asking questions that why the public sector financial giant has increased stakes in the group despite the Hindenburg controversy.
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#LIC #increases #holdings #Adani #stocks #Hindenburg #controversy
( With inputs from www.siasat.com )

April 12, 2023
Hindenburg report: Cong chalking out social media strategy to corner BJP

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New Delhi: The Congress, which has launched a series of agitational programmes over the Hindenburg report on the Adani Group, is now planning a wider social media campaign to reach out to the public and corner the BJP government at the Centre on this issue.
Senior Congress leader K.C. Venugopal has enlisted a series of programmes for the block-level leaders and workers, who have been asked to share their agitational programmes with him via e-mail.
“Our uncompromising fight shall continue for the next three months and a detailed social media campaign to expose the government-Adani nexus will follow soon,” he said.
The Congress has planned a series of agitations in front of nationalised banks and LIC offices at the block level from March 6-10, before holding a ‘Chalo Raj Bhavan’ march in different states on March 13.
“District-level ‘Parda Fash’ rallies will be held in all the states will be end in the end of March, which will continue in April. Congress President Mallikarjun Kharge and other top leaders of the party will address these meetings,” Venugopal said.
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#Hindenburg #report #Cong #chalking #social #media #strategy #corner #BJP

( With inputs from www.siasat.com )

March 1, 2023
‘Committee should examine truthfulness of Hindenburg report’, Centre to SC

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New Delhi: The Central government has told the Supreme Court that the “truthfulness” of the allegations levelled by a US short seller against the Adani Group should be examined and a fact-finding exercise is required to be undertaken as a one-time measure and without making it a precedent.
In a note submitted in the apex court, the Central government supported the formation of a committee to probe the allegations made in the Hindenburg report.
The government said in view of the unprecedented financial loss suffered by the investors and in view of the complexities involved in the subject which requires urgent consideration, a fact-finding exercise requires to be undertaken as a one-time measure and a committee can be constituted with a former judge of the Supreme Court as its head.
The Centre proposed the committee could include the Secretary in the Ministry of Home Affairs, and the Director of the Enforcement Directorate.
“The committee shall have all the powers to undertake an effective investigation with all powers which are available under the relevant legislations regulations/rules, including every authority and power to avail all assistance and protocols for its investigation outside India,” said the note.
It added that this committee should have no reflection either on the ability or competence of Sebi and all other statutory agencies, and it should submit a report within a period of eight weeks.
The Centre said the committee should submit a report “regarding the truthfulness or otherwise of the allegations levelled against Adani group of companies in the Hindenburg report”.
The note added, “To ascertain and submit a report regarding Hindenburg’s admitted claim of taking a ‘short position in Adani Group companies through US traded bonds and non-Indian traded derivatives instruments’ prior to the publication of its subject report with all underlying transactions undertaken/made either by Hindenburg itself, its associated companies/concerns and/or connected entities/individuals, whether within or outside India in violation of any regulatory/penal/preventive or other statutory provisions.”

It added that the committee should ascertain and submit a report regarding the details of all undisclosed “short positions” and/or other transactions, source of funds and profits made by short sellers in India or abroad prior to and/or in near proximity of the Hindenburg report.
“Suggest measures to strengthen investor awareness including at the point of trade. Suggest measures to strengthen statutory and/or regulatory framework for further and better protection of investors,” added the note.
The Supreme Court is yet to issue an order on setting up of a panel proposed to examine investor protection mechanisms against the backdrop of the Hindenburg report.
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#Committee #examine #truthfulness #Hindenburg #report #Centre
( With inputs from www.siasat.com )

February 17, 2023
‘Committee should examine truthfulness of Hindenburg report’, Centre to SC

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New Delhi: The Central government has told the Supreme Court that the “truthfulness” of the allegations levelled by a US short seller against the Adani Group should be examined and a fact-finding exercise is required to be undertaken as a one-time measure and without making it a precedent.
In a note submitted in the apex court, the Central government supported the formation of a committee to probe the allegations made in the Hindenburg report.
The government said in view of the unprecedented financial loss suffered by the investors and in view of the complexities involved in the subject which requires urgent consideration, a fact-finding exercise requires to be undertaken as a one-time measure and a committee can be constituted with a former judge of the Supreme Court as its head.
The Centre proposed the committee could include the Secretary in the Ministry of Home Affairs, and the Director of the Enforcement Directorate.
“The committee shall have all the powers to undertake an effective investigation with all powers which are available under the relevant legislations regulations/rules, including every authority and power to avail all assistance and protocols for its investigation outside India,” said the note.
It added that this committee should have no reflection either on the ability or competence of Sebi and all other statutory agencies, and it should submit a report within a period of eight weeks.
The Centre said the committee should submit a report “regarding the truthfulness or otherwise of the allegations levelled against Adani group of companies in the Hindenburg report”.
The note added, “To ascertain and submit a report regarding Hindenburg’s admitted claim of taking a ‘short position in Adani Group companies through US traded bonds and non-Indian traded derivatives instruments’ prior to the publication of its subject report with all underlying transactions undertaken/made either by Hindenburg itself, its associated companies/concerns and/or connected entities/individuals, whether within or outside India in violation of any regulatory/penal/preventive or other statutory provisions.”

It added that the committee should ascertain and submit a report regarding the details of all undisclosed “short positions” and/or other transactions, source of funds and profits made by short sellers in India or abroad prior to and/or in near proximity of the Hindenburg report.
“Suggest measures to strengthen investor awareness including at the point of trade. Suggest measures to strengthen statutory and/or regulatory framework for further and better protection of investors,” added the note.
The Supreme Court is yet to issue an order on setting up of a panel proposed to examine investor protection mechanisms against the backdrop of the Hindenburg report.
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#Committee #examine #truthfulness #Hindenburg #report #Centre
( With inputs from www.siasat.com )

February 17, 2023
Adani appoints Grant Thornton for audit to come clean on Hindenburg allegations

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New Delhi: Embattled Adani group has appointed accountancy firm Grant Thornton for an independent audit of some of its companies in a bid to come clean of the damning allegations levelled by the US short-seller Hindenburg Research and to assure investors and regulators.
Sources said that the audit is primarily to show regulators like the Reserve Bank of India (RBI) that the group has nothing to hide and it is in compliance with relevant laws.
The audit will specifically look into if there was any misappropriation or repatriation of funds and if loans were used for any purpose other than the one they were intended for.
The audit, they said, would go a long way to show that the books are healthy and project executions are on track – something that the investors are keenly watching given the damage to market value that the Hindenburg report has caused.
As the run on its shares continued, Adani Group had on Monday attempted to calm the market, saying its growth plans are intact, business plans are fully funded and it remains confident of delivering returns to shareholders.
Market value of the group’s seven listed companies has halved since the January 24 report by the US-based short-seller Hindenburg Research alleged that Adani pulled “the largest con in corporate history” using offshore tax havens and stock manipulation.
The group has denied all allegations, calling them “malicious”, “baseless” and a “calculated attack on India”. It called Hindenburg the “Madoffs of Manhattan”, referring to the late financier and fraudster Bernie Madoff.
“Balance sheet of each of our independent portfolio companies is very healthy,” the group spokesperson had said. “We have industry leading development capabilities, strong corporate governance, secure assets, strong cash flows, and our business plan is fully funded.”

The group debunked reports of a cut in growth goal and capex. Projects may be delayed but none is shelved or deferred and plans for expansion of solar, green hydrogen and airports were on track.
“Once the current market stabilizes, each entity will review its own capital market strategy, be rest assured, we are confident in the continued ability of our portfolio to deliver superior returns to shareholders,” the spokesperson added.
The Adani crisis has sparked worries of financial contagion in India and ability to carry on infrastructure projects.
Last week, French oil major TotalEnergies said it would wait for the result of an independent audit before proceeding with investing in Adani Group’s USD 50 billion plans to make green hydrogen.
According to Bernstein Research, Adani Green is capable of paying off all its debt of Rs 22,000 crore due in the financial year ending in March 2025, if it divests some renewable energy assets, seeks fresh equity capital from existing investors, or cancels some planned projects and avoids bidding for new ones.
The spokesperson, however, termed questions over the group’s ability to fund projects and refinance debt as ‘unfounded speculation’.
Last week, Moody’s Investors Service downgraded the ratings outlook for four Adani group companies to negative from stable, while index provider MSCI said it would cut the weightage of some of its stocks in its indices.
Finance Minister Nirmala Sitharaman on Saturday said the country’s regulators are very experienced and are seized of the matter relating to the Adani Group crisis.
“India’s regulators are very, very experienced and they are experts in their domain. The regulators are seized of this matter and they are on their toes as always, not just now,” she had said.
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( With inputs from www.siasat.com )

February 14, 2023
Why not JPC in Hindenburg Adani row, asks Congress after Centre response in SC

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New Delhi: In wake of the Centre telling the Supreme Court that the government has no objections on committee to probe the matter in wake of the Adani-Hindenburg Group episode, Congress leader Jairam Ramesh on Monday questioned the government on why it was not agreeing to a joint parliamentary committee (JPC).
“Today in Supreme Court Solicitor General said Govt has no objection to a commitee to examine the Hindenburg report on Adani. Then why the stubborn refusal to a JPC which will anyway be dominated by BJP & its allies? But will the proposed committee investigate Hindenburg or Adani?” he said.
Various opposition parties have been demanding a JPC to examine the whole issue as they alleged that many PSBs and LIC have lost money.
The Central government on Monday informed the Supreme Court that the existing structure, which includes the Securities and Exchange Board of India (Sebi) and others agencies, are fully equipped to handle the situation which occurred after Hindenburg report on Adani group, and it would not oppose the court’s suggestion to constitute a committee to strengthen the existing regime.
It stressed that the court could permit it to suggest the remit of that committee with possible suggestions of names of the committee.
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#JPC #Hindenburg #Adani #row #asks #Congress #Centre #response

( With inputs from www.siasat.com )

February 13, 2023
Hindenburg report exposes dangers Indians, economy are subjected to: BRS’ Keshava Rao

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New Delhi: Bharat Rashtra Samithi (BRS) MP K Keshava Rao on Wednesday gave a Suspension of Business Notice in Rajya Sabha demanding a discussion on the Hindenburg Report on Adani Enterprises and other companies of Adani Group.
Rao gave the Suspension of Business Notice in the lower house of parliament, during its ongoing Budget Session, under rule 267.
In the notice to the Rajya Sabha Chairman, he said that the report had revealed the dangers to which the country and its economy have been exposed to.
“I desire to move the following Motion…That this House suspend the Rules, pertaining to Business listed in today’s (8.2.2023) Agenda and take up discussion of Hindenburg Report on M/s Adani Enterprises and other companies of his group. Sir, The report exposes the dangers to which the Indian people and economy are subjected to and merit immediate discussion, adjourning today’s list of Business in the House, as sought,” it read.
The concerned report is from US-based Hindenburg Research that surfaced on January 24 and claimed that the Adani Group had weak business fundamentals, and was involved in stock manipulation and accounting fraud, among others.
According to a statement by the Adani Group, the Adani portfolio and the Adani verticals are focused on bringing India into the global economy and nation-building. In the summary of the long response by Adani Group, it said the report was “nothing but a lie”.
The report, however, triggered a sell-off of shares of all Adani Group companies.
Earlier claiming that Hindenburg Research has “exploited innocent investors”, advocate Manohar Lal Sharma filed a public interest litigation in the Supreme Court seeking a probe against the US-based firm, whose report has led to shares of Adani group plunging on the bourses.
The PIL by a lawyer sought an inquiry to prosecute short sellers Nathan Anderson, a resident of US and founder of the Hindenburg Research [which published a report recently leading to a huge dent in the Adani Group firms’ assets], and his Indian entities. The plea also sought to register an FIR against Anderson and his associates for exploiting and duping lakhs of innocent investors.

Notably, the Opposition has been continuously demanding a discussion on the Adani-Hindenburg row and is seeking the response of Prime Minister Narendra Modi on the issue.
Opposition parties are also demanding a joint parliamentary committee probe into the allegations of stock manipulation against the Adani Group.
The budget session of Parliament started on January 31 this year with the joint Address by President Droupadi Murmu. Union Finance Minister Nirmala Sitharaman presented the Budget 2023-24 on February 1.
Since then there has been no business in Parliament because of the continued logjam over the Adani issue. The Opposition has demanded that the government should come up and respond in Parliament about the Adani stock issue following which disruption has been witnessed in both Houses.
Congress is continuously cornering the government over the issue in Parliament forcing the adjournments of both Houses during the Budget Session.
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( With inputs from www.siasat.com )

February 8, 2023
Plea in SC seeks constitution of committee to probe Hindenburg Research report on Adani Group

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New Delhi: A plea has been filed in the Supreme Court seeking a direction to the Centre to constitute a committee monitored by a retired apex court judge to enquire and investigate into the Hindenburg Research report which made a slew of allegations against the business conglomerate led by industrialist Gautam Adani.
The fresh public interest litigation (PIL), filed by advocate Vishal Tiwari, has also sought directions to set up a special committee to oversee the sanction policy for loans of over Rs 500 crore given to big corporates.
Last week, another PIL was filed in the apex court seeking prosecution of short seller Nathan Anderson of US-based firm Hindenburg Research and his associates in India and the US for allegedly exploiting innocent investors and the “artificial crashing” of Adani Group’s stock value in the market.
The Adani Group stocks have taken a beating on the bourses after Hindenburg Research made a litany of allegations including fraudulent transactions and share-price manipulation against the business conglomerate led by Gautam Adani.
The Adani Group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.
In his plea, Tiwari has said the petition depicts the “drastic condition and fate of people” when there arises a situation of share fall in the securities market due to various reasons.
“Lots of people who had the whole lifetime saving in such stocks get a maximum setback due to fall in such shares with a huge amount of money getting into drain,” the PIL said.
It said with the recent news of the publication of the Hindenburg report, it has led to the loss of huge amount for various investors who have invested their life-saving in such shares.

“In the aftermath of an unprecedented attack on billionaire Gautam Adani’s vast empire by Hindenburg, the market value of all 10 Adani stocks have halved with investors sitting with a colossal loss…,” the plea said.
It claimed that no concrete steps have been taken by authorities on the issue despite a “massive attack being perpetrated” on the country’s economy.
“It is ultimately the public money for which the respondents (Centre and others) are answerable and there needs to be strict concern for mitigating of such loans with a clear process and sanction policy for such high stake loan amount,” it said.
The plea has made the Centre and others, including the Reserve Bank of India and the Securities and Exchange Board of India, as respondents.
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#Plea #seeks #constitution #committee #probe #Hindenburg #Research #report #Adani #Group
( With inputs from www.siasat.com )

February 6, 2023