In response to accusations of fraud by an investment firm, a huge Indian business conglomerate called the Adani Group issued a 413-page rebuttal. That’s about 113,000 words

…or 112,977 too many.

The attack, from a firm called Hindenburg Research, alleges “brazen accounting fraud, stock manipulation, and money laundering” that add up to “the largest con in corporate history.”

It’s an attack because Hindenburg makes money by targeting companies it thinks are overvalued and selling shares it doesn’t own, in hopes that prices will drop so it can buy them for less (and then turn around and fulfill its commitment to sell them for more). The strategy, called short selling, can also involve pushing information, whether detailed or vague innuendo, that might help said share prices to fall.

From what I can tell, Adani is no saint and his companies have been involved in numerous conflicts and lawsuits with individuals, communities, and governments (like most all huge industrials). 

But the premise that Hindenburg could not only allege but prove levels of chicanery that all of Adani’s previous accusers failed to find is simply not believable.

It is far more likely that it’s doing what short sellers do.

Adani’s response only helped Hindenburg do it.

It felt so threatened by Hindenburg’s allegations that it went into detail refuting them. This was like gold to the short sellers, because it made its accusations seem even more substantive and, at its whim, it could challenge or deny any of the responses. Nobody cares about the details anyway; the only thing that matters that there’s an ongoing argument. The firm is already riffing on Adani’s response.

There must be something to argue about, right?

Instead, it should have said something like this:

Attacking publicly listed stocks like Tesla, Amazon, or Adani-related companies for financial gain is mercenary and immoral. It may also be criminal.

No quibble. No nuance. Avoid giving the opposition any grist for the mill.

Only Adani went even further, claiming that the allegations were “a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India.”


I’m not even sure what it meant, but trying to broaden Hindenburg’s attack to everyone and everything in India is so odd that it suggests some sort of “don’t look here, look over there” kind of defense.

Instead, it should have gone behind the scenes to its friends in government, industry, and private institutions and asked them to issue statements on the quality of its business practices. Even if those comments amounting to little more than “it has broken no laws” or “we do not support its business objectives but have found no basis to question the legality of its actions.”

Hindenburg’s allegations rely on the presumption that there are really big, scary secrets underlying Adani’s operations. Shining a light on them, including highlighting all of the ways it has done things imperfectly and made enemies, refutes that idea.

I’m sure there are huge PR firms and management consultants advising Adani on what to do, and they’ve clearly billed many, many hours of work preparing its response so far. My bet is that somebody high up at the client demanded all that detail (or felt personally wronged by the attack) and its consultants were only too happy to comply.

Giving the client what it wants is a surefire way to get paid. It’s also a master class in communications failure.

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