Hindenburg report on India's Adani Group 'highly credible': Bill Ackman

Billionaire hedge fund manager Bill Ackman has said that he found short-seller Hindenburg Research's report on Adani Group "highly credible and extremely well researched."

"Adani's response to @HindenburgRes is the same as @Herbalife’s response to our original 350-page presentation. Herbalife remains a pyramid scheme. I found the Hindenburg report highly credible and extremely well researched. @AdaniOnline response speaks volumes. Caveat emptor," Ackman said in a tweet on Thursday. 

"We are not invested long or short in any of the Adani companies ... nor have we done our own independent research," Ackman added.

Gautam Adani is Asia's richest person and the world's third-richest person. 

Shares in seven listed group companies of Adani lost $10.73 billion in market capitalisation in India on Wednesday after Hindenburg released the report, which accused the conglomerate of improper use of offshore tax havens and also said it held short positions in the company through its US-traded bonds and non-Indian-traded derivative instruments.

Ackman bet $1 billion against Herbalife starting in 2012, saying it violated Chinese direct-selling laws and was a pyramid scheme.

He exited his short in Herbalife at a loss in 2018 when his bets went awry, with the shares of the weight management and nutrition company rising more than 150 percent.

Adani Group did not immediately respond to Reuters news agency's request for comment.

READ MORE: India's Gautam Adani accused of pulling 'largest con in corporate history'

Earnings manipulation

Hindenburg claims that Adani's elder brother Vinod "manages a vast labyrinth of offshore shell entities" in tax havens including Mauritius, Cyprus and several Caribbean islands.

Hindenburg said it had identified numerous instances of undisclosed related-party transactions and earnings manipulation "to maintain the appearance of financial health and solvency" of listed Adani companies.

Adani Group, however, rubbished the report. 

"The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations," Adani Group chief financial officer Jugeshinder Singh said in a statement.

Adani Group is India's second-largest conglomerate, with the combined market capitalisation of its seven listed companies exceeding $218 billion.

In a statement to Indian exchanges, Adani Group head of legal, Jatin Jalundhwala, called the report by the US research group "maliciously mischievous, (and) unresearched".

"We are evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research," the statement said.

READ MORE: Asia’s richest man was shorted by a US research firm. Chaos ensued

Hindenburg throws another challenge 

In a statement posted on its Twitter account, Hindenburg said, "Regarding the company's threats of legal action, to be clear, we would welcome it."

"We fully stand by our report and believe any legal action taken against us would be meritless."

"If Adani is serious, it should also file suit in the US where we operate. We have a long list of documents we would demand in a legal discovery process," Hindenburg stressed.

Founded by Nathan Anderson in 2017, Hindenburg says it looks for "man-made disasters" in companies, such as accounting irregularities and mismanagement.