Adani Group enlists Wachtell to take on short seller as stocks take a beating

Wall Street firm renowned for activism defence work has joined Indian conglomerate's legal team, the Financial Times has reported
Adani Group logo seen on the smartphone screen and company stock price drop graph seen on the blurred background. Real stock chart for a month timeframe. Stafford, United Kingdom, February 2, 2023

Ascannio; Shutterstock

The Adani Group has engaged Wall Street's Wachtell Lipton Rosen & Katz to fight back against allegations of fraud made by short seller Hindenburg Research, according to the Financial Times. 

The Indian conglomerate – whose interests range from port operations to news broadcasting – will draw on the Wall Street firm's expertise defending public companies under attack from shareholder activists as it seeks to rebut allegations of stock manipulation and accounting fraud.

New York-based Hindenburg levelled the accusations in a report disclosing its short position late last month, prompting a 413-page rebuttal from the group which described the report as ‘a malicious combination of selective misinformation and concealed facts relating to baseless and discredited allegations'.

The group's companies have lost $100bn in value, halving chairman and founder Gautam Adani's personal fortune while earlier today (10 February) Moody’s downgraded the ratings outlook for some Adani Group companies and MSCI said it would cut the weightings of some in its stock indexes. 

Wachtell was approached by the Adani Group's Mumbai-based advisers Cyril Amarchand Mangaldas (CAM), which is leading the defence, according to the FT. The Wall Street firm will focus on co-ordinating the legal, regulatory and public relations response for Adani Group, the FT said, including seeking to engage crisis communications firms. 

CAM is led by Cyril Shroff, whose daughter Paridhi is Gautam Adani’s daughter-in-law and a partner at the law firm; she has advised various Adani companies on acquisitions and joint ventures. 

Wachtell has carved out a formidable reputation as an expert in defending companies targetted by shareholder activists, with a roster of clients including AOL, Vulcan Materials, Clorox, Forest Laboratories, CVR Energy, Target, Motorola, Office Depot, Longs Drugs, Lionsgate and Convergys, according to its website.

A Wachtell memo on Dealing with Activist Hedge Funds and Other Activist Investors, which was published in September 2021 by founding partner Martin Lipton, Steven A. Rosenblum, Karessa L Cain, Sabastian V Niles and Anna Dimitrijević, warns: ‘As we have previously noted, regardless of industry, size, performance or “newness” to the public markets, no company should consider itself immune from activism.'

Other recent high-profile instructions for Wachtell include advising Twitter during its takeover battle with Elon Musk.


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