When the Adani Group was hammered in early 2023 by US hedge-fund allegations of rampant share-price manipulation, the company’s denial was slow and lumbering. This time, the Adanis have hit back fast and hard against front-page allegations in London’s Financial Times that it sold low-grade coal at hugely inflated prices to Tamil Nadu power stations. Coming out with all guns blazing, the group led by billionaire Gautam Adani, has called the newspaper’s charges “absurd” and “baseless”.

“With the supplied coal having passed such an elaborate quality check process by multiple agencies at multiple points, clearly the allegation of supply of low-quality coal is not only baseless and unfair but completely absurd,” a company spokesperson declared hours after the accusations surfaced last weel on Thursday.

The group’s swift damage control appears to have succeeded. On Friday, Adani Enterprises, the Adani Group flagship company, climbed 1.91 per cent to hit an all-time peak of Rs 3,456.25. Adani Enterprises has now erased all the losses it incurred following the bombshell report by Hindenburg Research on January 24, 2023, that accused the group of accounting fraud and stock price manipulations.

The allegations repeatedly denied by the Adanis, sent investors fleeing and wiped $30 billion off the shares of Adani Enterprises’ shares and $100 billion off the value of the entire group. But now Adani Enterprises’ stock has almost tripled in price since hitting its all-time post-Hindberg low.

After the FT story broke Thursday, leading US financial services firm Cantor Fitzgerald put out a note to investors on Adani shares, rubbishing the FT report as “an immaterial story.”

The sequence of events in wake of the FT story was in stark contrast to the Adani group’s low-key – some critics said fumbling response –to the accusations of corporate malfeasance by Hindenburg.

Adani Enterprises’ shares rose smartly on analysts’ expectations that the flagship will be included in the benchmark 30-share BSE Sensex next month. (That inclusion would be good news as it would enlarge the numbers of investors in the stock and enhance its price potential.)

The stock market valuation of the entire group is now less than $30 billion shy of its its market value just before the Hindenburg report was released, according to Bloomberg. Adani group company shares began recovering last year when star emerging-market asset manager Rajiv Jain bought nearly $2 billion worth of stock in Adani Enterprises and three other group firms.

The purchase by Jain’s GQG Partners boosted the confidence of investors that the 10 Adani companies would rebound in value. The big rally has made Jain a massive winner as he bought the shares near the trough of the Adani stock meltdown.

The Adani Group insisted that the ship which the FT alleged carried the substandard consignment in December 2013 had not transported coal from Indonesia for the group before February 2014.

The FT claimed that coal, with a listed price of $28 per tonne, was sold to Tangedco – the Tamil Nadu Generation and Distribution company – for $92. Furthermore, the FT asserted that the suspect coal, which

was said to have a calorific value of 3,500 calories per kilogramme, was passed off as 6,000 calorie coal.

Cantor Fitzgerald, though, in its note titled: “FT Article is Just Noise From a Long Time Ago,” said “the quality of the coal is tested

not by the supplier but by the receiving plant, Tangedco. The payment is then based on these findings.”

The financial firm added that as a result, “the assertion Adani could buy lower GCV (gross calorific value) coal and sell it as higher GCV coal appears to not be plausible, given testing is done by the buyer and payment is based on testing.”

Adani said that as all testing is done by the buyer, it would not be possible to pass off an inferior grade of coal. "The payment is dependent on the quality of coal supplied, which is determined through the testing process," the group said.

The FT based its story on documents obtained by the Organized Crime and Corruption Reporting Project (OCCRP) which is backed by billionaire financier and philanthropist George Soros who has been a strong critic of Prime Minister Narendra Modi and what he sees as his “nationalist” tendencies.

The Adanis noted that the FT’s charges were all part of an earlier investigation by the Directorate of Revenue Intelligence (DRI) into coal trading involving 40 companies and not just the Adani group. The group says: "The Adani companies furnished details sought by the DRI more than four years ago. Thereafter, the DRI has not asked for further documents. Nor has the DRI communicated any deficiency or objection."

Cantor Fitzgerald added there was another aspect to the FT story that raised questions. During the time period from 2012-2-14, customs and the revenue officials accused all coal importers of claiming the coal quality was lower than it actually was, the firm said.

“As a result, they wanted additional customs duties. So the fact this report argues against what DRI/customs was saying back then also raises a red flag,” Canton Fitzgerald concluded.