BTrading in chicken stocks resumed after the public holiday in India Giant Gautam Adani Group felt the consequences of the attacks from America: Adani’s listed companies totaled nearly $50 billion in price losses in India on Friday afternoon. Adani’s holdings fell below $100 billion. Analysts of Hindenburg Research, the American short selling company, on Wednesday attacked the group of the then third richest man in the world. The founder announced legal action against the Hindenburg on Friday.
The Americans responded coldly: “We have a long list of documents that we would have disclosed in a trial,” they warned. He credited the great American investor Bill Ackman: The Hindenburg Report was “extremely reliable and very well researched”.
Adani’s General Counsel, Jatin Jalundhwala, spoke of “a deliberate and reckless attempt by a foreign company to mislead the investment community and the public, undermine the reputation and reputation of the Adani Group and its executives, and sabotage the sale of shares of Adani Enterprises.””.
Adani proceeded to sell more shares in the companies, which was scheduled to start on Friday, as if nothing had happened. The big institutional buyers — including the Abu Dhabi Investment Authority, Goldman Sachs, Nomura and Morgan Stanley — have stuck with it. Meanwhile, large portions of his group were beset by disaster.
Shares of Adani Enterprises lost 14 percent of their value on Friday afternoon, while other group companies lost a fifth. The corporate price rank is lower than the issue price of the new paper. Accordingly, small investors have so far only bought a good one percent of the shares on offer, which could have been quickly expropriated before the attack. India’s supervisors can no longer avoid investigating massive allegations by Americans.
Indian regulators scrutinize the Adani family’s investments abroad, in tax havens such as Mauritius – where many Indians take their money, often in order to return it home with effective taxes. Hindenburg said the Indian group had previously been “at the center of four major government fraud investigations involving money laundering, tax theft and corruption totaling $17 billion.” On the other hand, CFO Adani Jugeshinder Singh said, “The allegations have been investigated and dismissed by India’s highest courts.”
On Friday, the wave then reached Indian banks backing Adani. The state institutes index lost 6.6 per cent in Mumbai Economic City (Bombay). Analysts at CLSA estimate that Indian banks account for about 40 percent, or about $25 billion, of the group’s debt — an amount it could take on on the bottom line. “The volatility in the Indian stock market due to the report is ominous and has created unwanted fears among the citizens of India,” said Jalondwala. Adani is far from standing alone. Especially since his eldest son, who controls the core business of the group, is married to Paridhi Shroff. The lawyer is the daughter of Cyril Shroff, who with his law firm Cyril Amarchand Mangaldas is the most important legal advisor to the Indian entrepreneurial world and the sub-continent.
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