Gautam Adani-led conglomerate has hired US legal firm Wachtell in short-seller battle against US-based Hindenburg Research
Known to be one of Wall Street’s fiercest defence law firms, Wachtell has been hired as the Adani Group seeks to reassure its investors about the conglomerate’s health.
“In recent days, the Adani Group has tapped senior lawyers at New York’s Wachtell, Lipton, Rosen & Katz to advise it on how to stem the crisis facing the Indian conglomerate since Hindenburg accused it of accounting fraud and stock market manipulation in late January,” the FT report said quoting four sources.
Adani group company stocks have been volatile since the US-based research firm levelled allegations against Adani group in a report on January 25. The conglomerate has been in a firefighting mode since that day, resulting in withdrawal of it’s much-awaited ₹20,000-crore FPO. Since then, the group has even paid off some of its debt against pledged shares.
While Moody’s Investor Service on Friday revised downwards the rating outlook on four Adani Group companies to ‘negative’ from ‘stable’ after a significant and rapid decline in market value following a report by US-based short-seller Hindenburg Research.
In a statement, Moody’s said the rating outlook for Adani Green Energy Ltd, Adani Green Energy Restricted Group, Adani Transmission Step-One Ltd and Adani Electricity Mumbai Ltd has been changed to ‘negative’ from ‘stable’.
These rating actions follow the significant and rapid decline in the market equity values of the Adani Group companies following the recent release of a report from a short-seller highlighting governance concerns in the Group,” it said. Adani group companies have lost USD 100 billion in market value since the US short-seller Hindenburg Research came out with a damning report alleging fraud at the conglomerate helmed by Gautam Adani. Adani Group has denied all allegations and threatened to sue Hindenburg.
Moody’s said it has affirmed the ratings on eight Adani Group companies.
“At the same time, Moody’s has changed the outlook on four issuers to negative from stable, while maintaining the stable outlook on other four companies,” the statement said.
The rating outlook was downgraded for the group’s renewable energy firms Adani Green Energy Ltd (AGEL) and Adani Green Energy Restricted Group (AGEL RG-1) comprising Adani Green Energy (UP), Parampujya Solar Energy Pvt Ltd and Prayatna Developers Private Ltd. Its transmission unit Adani Transmission Step-One Ltd (ATSOL) and Adani Electricity Mumbai Ltd (AEML) too faced similar action.
