New Delhi: Index provider MSCI on Saturday said that it has sought feedback on Adani group securities after a report by US-based investment research firm Hindenburg alleged stock manipulation and accounting fraud by the conglomerate. The index provider said that it is aware of the reports recently published regarding the Adani group and associated securities.
"MSCI is closely monitoring publicly available information regarding the situation and the factors that may impact the eligibility of those relevant securities for the MSCI Global Investable Market Indexes," said the index provider in a statement. The index provider said it welcomes timely feedback from market participants on these issues.
At present, there are eight Adani group and associates companies which are part of MSCI Standard Index. Market experts believe that any adverse feedback may lead to a reduction in weightage or even exclusion of Adani stocks from the MSCI index. This might further increase the selling pressure faced by Adani group stocks, which took a beating for the past two trading sessions and lost more than Rs 4.17 lakh crore in the combined market valuation of listed firms. Market experts believe that MSCI will not take any action until the feedback process is concluded.
On Wednesday, Hindenburg, which specialises in activist short selling, made allegations of market manipulation and accounting fraud against Adani Group. The report was released just before Adani group's flagship company, Adani Enterprises' Rs 20,000 crore share offering opened to investors. The disclosure led to shares of Adani Group took a beating on the stock exchanges. The FPO, which opened on January 27, will conclude on January 31.
Hindenburg said that its two-year investigation reveals that "the Rs 17.8 trillion (USD 218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades."
Adani Group had said that it was shocked to see the report that came out without any attempt to contact it to get the factual matrix. "The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India's highest courts," it added.
The Adani Group also said that it is examining legal options to take "punitive action" against Hindenburg Research for its "reckless" attempt to sabotage a mega share sale at the conglomerate's flagship firm.
(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)