After Hindenburg's charges, the group is also under intense pressure from major international financial institutions.
Digital Desk: The Financial Times reported that the Indian conglomerate Adani Group has recruited one of Wall Street's most aggressive defence law firms to take on US short seller Hindenburg Research, which accused the company of stock manipulation and accounting fraud.
The development occurs as billionaire Gautam Adani continues to concentrate on persuading investors that his corporate empire has been established on a solid foundation and is not at risk of going bankrupt.
According to the FT report, which cited four people with knowledge of the situation, the Adani Group has spoken with senior attorneys at Wachtell, Lipton, Rosen & Katz in New York about finding a way to resolve the crisis it is currently experiencing after Hindenburg's allegations significantly reduced its total market capitalization and soured investor sentiment.
The Adani Group's hiring of Wachtell, one of the priciest law firms in the US, demonstrates how the Hindenburg report has affected its listed corporations. After Hindenburg's charges, the group is also under intense pressure from major international financial institutions.
By some of the biggest US corporations that have been the focus of activist investors or faced a hostile takeover, Wachtell has established a reputation as being the most sought-after consultant over many years. Adani Group reacted with a 413-page rebuttal to the accusations made by Hindenburg Research, but it had little to no effect on investors and international financial institutions.
The enormous Adani Group has three additional publicly-listed companies that it has purchased since last year in addition to the seven core listed businesses. Following the release of Hindenburg's research, the stock prices of all of these companies have drastically decreased. Even the follow-on public offering (FPO) of the conglomerate's flagship business, Adani Enterprises, had to be postponed. The research even reduced the market valuation of important Adani Group listed firms by over $110 billion.
In addition to preparing to take on Hindenburg, the Adani Group is reassuring international financial institutions and investors that the company is still in a good position by employing the US law firm. The promoters of Adani Group recently repaid $1.1 billion in loans to unlock pledged shares and improve market confidence. Additionally, it intends to make some early payments totaling $500 million to several overseas institutions.
According to the FT article, Wachtell was contacted by the top attorneys representing Adani Group at Cyril Amarchand Mangaldas, which is in charge of the industrial juggernaut's defence. According to sources cited in the FT piece, Wachtell has been attempting to secure more advisory support for the Adani Group, including from crisis communication agencies. The US law firm's primary focus will be on coordinating the group's legal, regulatory, and public relations needs.
The law practise with its headquarters in New York was established in 1965 by partners who also named the business. The legal team is known for taking on challenging corporate governance disputes.
With experience handling significant mergers and acquisitions, antitrust and shareholder litigation, and business restructurings, Wachtell is regarded as one of the top law firms in the US. Given its exceptional reputation, it is also among the most costly law firms in the US.
It should be emphasized that Twitter Inc. retained Wachtell during the time when it was planning a lawsuit against its current owner, Elon Musk. Wachtell was also a member of the legal team that defended Elon Musk and the board of Tesla Inc. in a lawsuit launched by Tesla shareholders over the company's purchase of solar panel manufacturer SolarCity. Additionally, it served as one of Elon Musk's legal counsel when he decided to take Tesla private in 2018.
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