Adani hires Grant Thornton to do some independent audits of Hindenburg’s fallout sources

NEW DELHI/NEW YORK, Feb 14 (Reuters) – India’s Adani Group has hired accounting firm Grant Thornton to independently audit some of its companies to discredit claims by short seller Hindenburg Research that its shares and bonds have hit two das people familiar with the matter said on Monday.

The appointment is Adani Group’s first major attempt to defend itself after a Jan. 24 report by Hindenburg accusing it of abusing offshore tax havens and stock manipulation.

The conglomerate, led by billionaire Gautam Adani, has firmly denied the allegations, but investors remain concerned. Shares in the group’s seven publicly traded subsidiaries have lost a total of around $120 billion in market value over the past three weeks.

The Adani Group said last week it was considering an independent assessment of issues related to regulatory compliance, related party transactions and internal controls following the Hindenburg report. Grant Thornton’s appointment is reported here for the first time.

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

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

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

Adani Group tried to reassure investors on Monday, saying it has strong cash flows, its business plans are fully funded and it is “confident in our portfolio’s continued ability to deliver superior returns to shareholders.”

But regulatory pressure has increased. India’s market regulator confirmed on Monday that it is investigating Hindenburg’s report, as well as market activity immediately before and after the report’s release.

The US short seller’s report said it had identified numerous “undisclosed related party transactions” from both publicly traded and private Adani companies and claimed they had violated Indian disclosure laws.

In his rebuttal, Adani had said that “all related party transactions are arm’s length, properly disclosed and verified/audited by independent auditors”.

Reporting by Aditya Kalra in New Delhi and Greg Roumeliotis in New York; Edited by Richard Chang

Our standards: The Thomson Reuters Trust Principles.

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