The Adani Group is likely to take US short-seller Hindenburg Research to court over its report accusing the Gautam Adani-led conglomerate of stock manipulation and accounting fraud. The company has hired one of Wall Streets legal powerhouses to take on Hindenburg Research, reported The Financial Times.
The FT report, quoting four people familiar with the matter, said that Adani Group has sought the services of senior lawyers at New Yorks Wachtell, Lipton, Rosen Katz for a solution to deal with the crisis triggered by Hindenburgs accusations.
Following the rout in the stock market, the conglomerate had to withdraw its Rs 20,000 crore follow on public offer.
The slide in the stock prices of the listed Adani Group companies significantly eroded its cumulative market capitalization and hurt investor sentiments.
Currently, billionaire Gautam Adani is focused on reassuring investors that his business empire has been built on a strong foundation and faces no financial risk.
Wachtell is one of the most expensive law firms in the US and its association with the Adani Group highlights the extent of the impact of Hindenburgs report.
According to the report, Wachtell has a strong reputation for being the most sought-after adviser by some of the largest US companies, who have been targeted by activist investors or faced a hostile takeover.
By hiring Americas fiercest law company, Adani is reassuring global financial institutions and investors that the company remains in a strong position and sending a signal that it continues to remain on a strong footing.
Amid the havoc, Adani Group has dismissed the allegations leveled by Hindenburg Research and responded with a 413-page rebuttal.
However, it hasnt been effective in impacting the investors and global financial institutions.
In order to reinstate investor confidence, Adani Groups promoters recently prepaid loans worth $1.1 billion to release pledged shares to boost market sentiment. The conglomerate is also planning to prepay $500 million to a group of foreign banks.
Founded in 1965, Wachtell, Lipton, Rosen Katz was named after the firms creators. It has a history of handling the most complex corporate governance cases.
Wachtell was hired by Twitter when it was preparing to sue its current owner Elon Musk.
The law firm was also hired by Elon Musk and Tesla board to fight a lawsuit brought by Teslas shareholders over the companys acquisition of solar panel maker SolarCity. It was also one of the legal advisers on Elon Musks plan to take Tesla private in 2018.
The FT report added that Wachtell was approached by Adani Groups top lawyers at Cyril Amarchand Mangaldas, which is leading the defense of the industrial giant.
