Mumbai:
Adani Group Chairman Gautam Adani at an event in Mumbai explained to the audience how the conglomerate countered false allegations in the Hindenburg matter, came out stronger, and bounced back in no time.
“As far as my first reaction was concerned – when the news first came, I could see that the published material was all old allegations, which had been recycled in a different way. Such attacks were not new – and I felt that, like many earlier attacks on us, this too will pass quickly. In fact, it was business as usual,” Mr Adani said.
Mr Adani, however, acknowledge it was a sophisticated form of attack on the conglomerate.
“The Hindenburg attack on Adani was the world’s biggest attack on a corporate. I also have no hesitation in saying that this attack was a unique two-dimensional attack, compared to typical short-seller attacks which are one-dimensional. This attack on us not only played out in the financial market but also played out in the political theatre. Both played out in conjunction, complementing and reinforcing each other, ably supported by a section of the media, both in India and abroad,” Mr Adani said.
He said the Adani Group “initially grossly underestimated the impact of this report”.
“However, very soon, we understood the conspiracy and its depth. With no precedence to handle a crisis of this nature and magnitude, we evolved our own contra-strategy to handle it – and the rest, as they say, is history,” he said.
Explaining the steps the conglomerate took following the short-seller’s attack, Mr Adani said the first step was to return the proceeds of the follow-on public offer (FPO) of Rs 20,000 crore on “moral grounds”.
The Adani Group then created a strong war-chest of cash of Rs 70,000 crore, prepaid Rs 17,500 crore of margin-linked financing, and insulated CEOs and executives from the noise. “I told them to tighten their belt and focus on business,” Mr Adani said.
The conglomerate further maintained the growth momentum and continued with expansion and new projects like Khavda, Dharavi, copper smelter – just to name a few. It created a war-room and answered all questions, Mr Adani said, adding they executed an extensive engagement programme with all their stakeholders.
The two key takeaways, according to Mr Adani, are cash is king, and the importance of engagement and strong communications with all stakeholders.
“Our biggest learning was that doing a good job is not enough – we must tell our story too. We need to communicate more – and communicate timely and more effectively,” Mr Adani said.
“I would also like to conclude by sharing that, in this whole Hindenburg affair, what pained me the most was that many retail shareholders lost money. I feel extremely bad for them as they lost money for no reason. There never was any truth in all those allegations – and this was later validated when our companies regained their financial value in the capital markets,” the Adani Group Chairman said.
(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)