Adani hires US legal firm Wachtell to fight short sales

Gautam Adani has hired one of Wall Street’s fiercest defense of activism law firms to counter claims by short seller Hindenburg Research as the Indian billionaire struggles to reassure investors about the financial health of his business empire.

In recent days, the Adani group has tapped senior lawyers at New York-based Wachtell, Lipton, Rosen & Katz to advise them on how to contain the crisis the Indian group has been facing since Hindenburg accused it of accounting fraud and stock market manipulation in late January said people with direct knowledge of the matter.

The Adani Group’s decision to hire Wachtell, known as one of the most expensive law firms in the US, shows the intense international pressure the group has faced since Hindenburg made his claims.

For decades, Wachtell has been a sought-after advisor to beleaguered boards of some of the largest US companies trying to fend off activist investors or hostile takeovers.

The Adani Group, whose business interests range from airports to energy, has faced difficulties since Hindenburg made his allegations from New York. The Gujarat-based company has disputed the claims in a 413-page rebuttal.

This week, global index provider MSCI changed its weighting for several Adani Group stocks after checking how many shares were available on the stock exchange, and the Financial Times reported that Gautam Adani approved a $1.1 billion equity-backed loan 500 million dollars.

Wachtell was approached by lawyers from the Adani group of India-based law firm Cyril Amarchand Mangaldas, which is leading the industry giant’s defense, people with knowledge of the matter added.

Cyril Amarchand Mangaldas is run by Cyril Shroff whose daughter Paridhi is married to Gautam Adani’s eldest son and works at the law firm.

Since accepting the role, Wachtell has sought further advisory support for the Adani group, including from crisis communications firms, some of the people said.

The Adani Group, Wachtell and Shroff declined to comment.

Wachtell will primarily focus on coordinating legal, regulatory and public relations work for the group, which has seen its market value plummet by more than $100 billion since Hindenburg released his paper on fraud allegations.

Founded in 1965 by the partners who gave the firm its name, Wachtell has built a reputation for handling complex corporate governance cases. Its track record of stopping unwanted attacks from corporate attackers since the 1980s has drawn clients into the crosshairs of investors and regulators.

Additional reporting by Chloe Cornish in Mumbai