Index provider Msci seeks Adani Group’s comments on Hindenburg report
Hindenburg, which specializes in activist short selling, brought allegations of market manipulation and accounting fraud against the Adani Group on Wednesday. The report was released just before Adani Group’s flagship company, Adani Enterprises’ Rs 20,000 crore share offering, opened for investors. The disclosure led to Adani Group shares taking a beating on the stock market.
Index provider MSCI said on Saturday it had sought comment on Adani Group securities after a report by US investment research firm Hindenburg alleging stock manipulation and accounting fraud by the conglomerate.
The index provider said it is aware of recently released reports regarding the Adani Group and related securities.
“MSCI is closely monitoring publicly available information regarding the situation and factors that may affect the eligibility of these affected securities for the MSCI Global Investable Market Indices,” it said in a statement.
The index provider said it welcomes timely comments from market participants on these matters.
Currently, eight Adani Group companies and associated companies are included in the MSCI Standard Index.
Market experts believe that any negative feedback may lead to a reduction in weighting or even the exclusion of Adani shares from the MSCI index.
This could further increase selling pressure on shares of Adani Group, which have been battered over the past two trading sessions and lost more than Rs 4.17 lakh crore against the combined market valuation of the listed companies.
Market experts believe that MSCI will take no action until the feedback process is complete.
On Wednesday, activist short-selling firm Hindenburg brought allegations of market manipulation and accounting fraud against the Adani Group.
The report was released just before Adani Group’s flagship company, Adani Enterprises’ Rs 20,000 crore share offering, opened for investors. The disclosure led to Adani Group shares taking a beating on the stock market.
The FPO, which opened on January 27, will close on January 31.
Hindenburg said his two-year investigation reveals that “Indian conglomerate Adani Group, worth 17.8 trillion rupees ($218 billion), engaged in a shameless scheme of stock manipulation and of accounting fraud over the decades”. The Adani Group said they were shocked to see the report published without any attempt to contact them for the factual matrix.
“The report is a malicious combination of selective misinformation and outdated, baseless and discredited allegations that have been tested and thrown out by India’s highest courts,” the energy ports conglomerate had said.
The Adani Group said it was shocked to see the report released without any attempt to contact it for the factual matrix.
While the Adani Group said it was examining legal options to take “punitive action” against Hindenburg Research for its “reckless” attempt to sabotage a mega share sale in the conglomerate’s flagship company – a statement to which the The US activist investor responded by saying he stood by his report alleging “brazen” market manipulation and accounting fraud by the group.
(Edited by : Anouchka Sharma)