The Adani Group has hired accounting firm Grant Thornton as it looks to solidify its defense against US short seller Hidenburg Research’s accusations. Read to know the finer details of the appointment.
The Adani Group has appointed accountancy firm Grant Thornton to conduct independent audits of some of its companies in a bid to discredit claims made by US short-seller Hindenburg Research.
Hindenburg Research accused the Gautam Adani-led conglomerate of stock manipulation and improper use of tax havens in a report released on January 24. Despite dismissing Hindenburg’s accusations, listed companies of the group have faced a bloodbath on Dalal Street over the past 20 days.
The report has also caused damage to the reputation of the conglomerate that has stakes in several industries, ranging from infrastructure to green energy.
The Adani Group has taken numerous steps to counter Hindenburg’s allegations, including reassuring investors about its strong liquidity position, prepayment of loans, hiring a top US law firm, and now appointing an accounting firm.
Grant Thornton’s role in solving the Adani crisis
The appointment of Grant Thornton is the first major step taken by the group to defend itself against the allegations levelled by Hindenburg.
While Adani Group has denied the allegations strongly, investors and shareholders remain concerned about the future of the group, and this has led to a situation of panic on the stock market as well. Shares of the group’s seven main listed companies have cumulatively lost about $120 billion in market value in the past three weeks.
In the wake of the crisis, Adani Group had said last week that it was considering an independent evaluation of issues relating to legal compliance, related party transactions and internal controls following the scathing report. This seems to be the reason the Adani Group has appointed Grant Thornton.
The accounting firm has been hired to conduct independent audits of some Adani Group companies, according to unnamed sources quoted in a Reuters report, adding that the appointment is confidential.
One of the sources said Grant Thornton will look at whether related-party transactions at the Adani Group comply with corporate governance standards. No official statement has come from either Grant Thornton or the Adani Group.
With the appointment of the accounting firm, the Adani Group hopes to gain back investor confidence. A few days ago, the Adani Group reassured investors by saying that it had strong cash flows and that its business plans were fully funded.
In a credit report issued by the Adani Group to stock exchanges, the conglomerate said there was “no material refinancing risk and near-term liquidity requirement as there is no near-term significant debt maturity”.
