June 19, 2024

Topline

India’s Adani Group has hired New York-based law firm Wachtell, Lipton, Rosen & Katz to take on allegations against it raised by short-seller Hindenburg Research, the Financial Times reported, as the shares of the group’s listed firms continued to take a beating on the Indian stock market on Friday.

Key Facts

According to the Financial TimesWatchell will work on the Adani Group’s “legal, regulatory and public relations” response to allegations of fraud raised against it by Hindenburg, late last month.

Watchell was first approached by Indian law firm Cyril Amarchand Mangaldas which represents the Adani Group and is led by founder Gautam Adani’s son-in-law Cyril Shroff, the report adds.

Late on Thursday index provider Morgan Stanley Capital International’s moved to lower the weightage for four Adani group companies—including the flagship Adani Enterprises—on its closely watched indices following a review.

In its announcement MSCI said it had determined that the “characteristics of certain investors have sufficient uncertainty” that triggered a reassessment of the total number of Adani shares that were being freely traded by international investors.

On Thursday, Hindenburg Research founder Nate Anderson said validates the short seller’s allegation of “offshore stock parking” by the conglomerate.

Shares of Adani Group’s listed firms were hit by a selloff once again on Friday with the flagship Adani Enterprises being down more than 3% in afternoon trading.

Forbes Valuations

According to our estimates, Gautam Adani’s current net worth stands at $58.2 billion—down nearly $7 billion in the past 24 hours—making him the 22nd richest person in the world. Adani has seen his fortune drop by more than 50% since Hindenburg’s allegations became public in the last week of January.

KeyBackground

Last month, Hindenburg disclosed a short position against the Adani Group’s listed firms and published a report accusing them of engaging in “brazen stock manipulation and [an] accounting fraud scheme over the course of decades.” The company has vehemently denied these allegations labeling them as “mischievous” and an attack on India and its institutions. The crisis surrounding the company spilled into the Indian parliament this week with opposition leader Rahul Gandhi chiding Indian Prime Minister Narendra Modi for his long-time close ties with Adani.

Further Reading

Adani hires US legal powerhouse Wachtell in short-seller battle (Financial Times)

How Gautam Adani Lost More Than $60 Billion In Just 10 Days—And His Ranking As Asia’s Richest (Forbes)