Hindenburg report under evaluation, Adani Group would be questioned: LIC
Life Insurance Corporation (LIC) on Monday said that the Adani Group's response to the US-based short-seller Hindenburg Research's criticism was under evaluation and the group's management would be questioned soon, Reuters reported. Reportedly, the shares of the conglomerate have fallen by roughly $66 billion since Hindenburg raised concerns about its debt levels and use of tax havens.
Why does this story matter?
- LIC response came a day after Adani Group claimed that its "strategic and long-term investors" have reposed confidence in the group following the Hindenburg report's allegations of stock manipulation, accounting fraud, etc.
- Notably, the group disapproved of the report and threatened legal action against the short seller.
- However, the allegations have had an impact on the group's stocks, causing its market capitalization to plummet.
LIC Managing Director says not sure of factual position
"Presently there is a situation that's emerging and we are not sure what is the factual position," Reuters quoted LIC Managing Director Raj Kumar as saying. "Since we are a large investor we have the right to ask relevant questions and we will definitely engage with them," he added. Notably, Gautam Adani-led group claimed to have complied with local regulatory laws and made disclosures.
Studying Adani Group's response, will seek clarifications: Kumar
"Of course, we are studying the 413-page reply given by Adani Group. We will also see if the concerns are addressed. If we believe the concerns are not addressed we will seek further clarification from them," said Kumar.
LIC's equity exposure at Rs. 56,142 crore
On Monday, LIC issued a clarification regarding its exposure to the Adani group of companies following a huge slump in its share prices. The insurer clarified that its share in the conglomerate purchased over the last many years is Rs. 30,127 crore, which amounts to the market value of Rs 56,142 crore (0.975% of the total assets under management) as on January 27.
Adani Group responds, terms Hindenburg allegations 'calculated attack on India'
Adani Group, the leading Indian conglomerate, released a detailed rebuttal on Sunday against allegations of stock manipulation and accounting fraud by Hindenburg Research, the US-based short seller. The group had claimed that the report by the activist investment firm was a "calculated attack on India."
Hindenburg v/s Adani Group faceoff so far
In a report released last week, Hindenburg Research accused the Adani Group of accounting fraud and market manipulation using offshore shell firms. The conglomerate's excessive debt and the exorbitant values of its listed firms were among the issues that the activist investment group brought up. In response, the legal chief of Adani Group came out swinging, describing the article as "malicious."
