Adani Group’s first attempt at defending itself

Two people familiar with the matter said Adani Group has hired Grant Thornton to conduct independent audits of some of its companies to discredit claims by short-seller Hindenburg Research.

The appointment represents the Adani Group’s first significant attempt to defend itself following a Hindenburg investigation from January 24 that accused the company of improperly using offshore tax havens and stock manipulation.

Investors are nonetheless anxious despite the conglomerate’s vehement denials of the accusations under billionaire Gautam Adani’s leadership. The market value of the seven listed subsidiaries of the group’s shares has decreased by a total of nearly $120 billion during the past three weeks.

In response to the Hindenburg report, Adani Group stated last week that it was thinking about having an outside assessment of its internal controls, related party transactions, and legal compliance-related issues. This is the first mention of Grant Thornton’s appointment.

Sources declining to be named because the appointment is confidential said Grant Thornton had been hired to conduct independent audits of some Adani Group companies.

One of the sources added that Grant Thornton would look at whether related-party transactions at the Adani Group comply with corporate governance standards.

Grant Thornton and Adani Group did not immediately respond to a request for comment.

Adani Group sought to reassure investors on Monday, saying it had strong cash flows, its business plans were fully funded and that it was “confident in the continued ability of our portfolio to deliver superior returns to shareholders.”

But regulatory pressure has been increasing. India’s market regulator confirmed on Monday that it was investigating Hindenburg’s report, as well as the market’s activity before and after the report was published.

Several “undisclosed related party transactions” were identified by both listed and private Adani companies, according to the U.S. short-seller’s report.

According to Adani’s rebuttal, “all related party transactions are at arm’s length, properly disclosed, and reviewed and audited by independent auditors.”