Embattled Adani group has appointed accountancy firm Grant Thornton for an independent audit of some of its companies in a bid to come clean of the damning allegations levelled by the US short-seller Hindenburg Research and to assure investors and regulators.
Sources said the audit is primarily to show to regulators like the Reserve Bank of India (RBI) that the group has nothing to hide and it is in compliance with relevant laws.
The audit will specifically look into if there was any misappropriation or repatriation of funds and if loans were used for any purpose other than the one they were intended for.
The audit, they said, would go a long way to show that the books are healthy and project executions are on track – something that the investors are keenly watching given the damage to market value that the Hindenburg report has caused.
As the run on its shares continued, Adani Group had on Monday attempted to calm the market, saying its growth plans are intact, business plans are fully funded and it remains confident of delivering returns to shareholders.
The group has denied all allegations, calling them malicious, baseless and a calculated attack on India. It called Hindenburg the Madoffs of Manhattan, referring to the late financier and fraudster Bernie Madoff.
Balance sheet of each of our independent portfolio companies is very healthy, the group spokesperson had said. We have industry leading development capabilities, strong corporate governance, secure assets, strong cash flows, and our business plan is fully funded. The group debunked reports of a cut in growth goal and capex. Projects may be delayed but none is shelved or deferred and plans for expansion of solar, green hydrogen and airports were on track.
Once the current market stabilizes, each entity will review its own capital market strategy, be rest assured, we are confident in the continued ability of our portfolio to deliver superior returns to shareholders, the spokesperson added.
According to Bernstein Research, Adani Green is capable of paying off all its debt of Rs 22,000 crore due in the financial year ending in March 2025, if it divests some renewable energy assets, seeks fresh equity capital from existing investors, or cancels some planned projects and avoids bidding for new ones.