Adani Group has appointed Grant Thornton, the US accountancy firm, to conduct independent audits of some of its companies as part of its efforts to counter allegations made by short-seller, Hindenburg Research, news agency Reuters reported quoting two people familiar with the matter.
The appointment follows a report by Hindenburg Research on January 24th which accused Adani Group of using offshore tax havens and stock manipulation. Adani Group has denied the allegations, but its stocks and bonds have taken a hit, with its listed subsidiaries collectively losing $120 billion in market value in the last three weeks.
Last week, Adani Group had stated that it is considering independent evaluations to address issues related to legal compliance, related party transactions, and internal controls following the Hindenburg report.
Grant Thornton has been hired to conduct independent audits of Adani Group companies to investigate whether related-party transactions comply with corporate governance standards, Reuters quoted its sources as saying .
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Adani Group has emphasized that it has strong cashflows and that its business plans are fully funded, and it remains confident in the continued ability of its portfolio to deliver superior returns to shareholders.
However, regulatory pressure is mounting, and India's market regulator is investigating the report by Hindenburg, as well as market activity immediately before and after the report's publication.
The report by Hindenburg had identified numerous undisclosed related-party transactions by both listed and private Adani companies, alleging that it was in violation of Indian disclosure laws. Adani Group had responded that all related-party transactions are properly disclosed, reviewed, and audited by independent auditors.
