The said report has accused the Ahmedabad-based Adani Group of “brazen” market manipulation and accounting fraud. In its response, the business conglomerate termed the report as "a malicious combination of selective misinformation and stale, baseless and discredited allegations". The report was released hours before the Rs 20,000 crore Follow on Public Offer (FPO) of Adani Enterprises was set to open for subscription.
The timing of the report, as per the Adani Group statement, "clearly betrays a brazen, mala fide intention to undermine and damage the share sale plan". Hindenburg Research, a fewer than 10-member firm, was founded in 2017 and claims of putting out detailed reports on corporates and their alleged wrongdoing. While doing this "public service", as per their own admission, the firm and its investors make financial bets on the stocks of the companies that they are going to target in their research and when the stock prices of these companies fall, as happened in the case of Adani Group, Hindenburg, Anderson and its institutional backers make money through what is called a "short" trade.
In simple words, they publish critical reports on companies, push the said report widely on social media and in news media to negatively impact the stock's price even as the same author and their institutional backers borrow shares of the target company from a brokerage firm and then sell them, expecting the stock price to fall on account of their negative research.
This story is from the January 29, 2023 edition of The Sunday Guardian.
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This story is from the January 29, 2023 edition of The Sunday Guardian.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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