MUMBAI, Jan 25, 2023 (BSS/AFP) - Asia's richest man Gautam Adani saw his net
worth drop six billion dollars on Wednesday after a US investment firm
accused him of "brazen stock manipulation and accounting fraud".
Adani, 60, is the world's third-richest person, with an estimated fortune of
around $120 billion and interests ranging from Australian coal mines to
India's busiest ports.
But the magnate was the biggest loser on Forbes' real-time billionaires list
on Wednesday, dropping nearly five percent -- or $6.4 billion -- of his net
worth overnight as investors rushed to sell shares in his group of companies.
Hindenburg Research published a report on Tuesday alleging that Adani Group
"has engaged in a brazen stock manipulation and accounting fraud scheme over
the course of decades".
The firm said it had taken a short position in Adani Group companies after a
two-year investigation based on interviews with former executives, site
visits in multiple countries and document reviews.
Its report claims that Adani's elder brother Vinod "manages a vast labyrinth
of offshore shell entities" in tax havens including Mauritius, Cyprus and
several Caribbean islands.
Hindenburg said it had identified numerous instances of undisclosed related-
party transactions and earnings manipulation "to maintain the appearance of
financial health and solvency" of listed Adani companies.
The allegations come ahead of an ambitious $2.5 billion follow-on public
offer -- India's biggest-ever -- due to open for bids on Friday and aimed at
bolstering the business empire's balance sheet.
"The report is a malicious combination of selective misinformation and stale,
baseless and discredited allegations," Adani Group chief financial officer
Jugeshinder Singh said in a statement.
Singh added that the report had been deliberately timed to undermine the
conglomerate's reputation "with the principal objective of damaging the
upcoming follow-on public offering".
- 'Afraid to speak out' -
Adani Group is India's second-largest conglomerate, with the combined market
capitalisation of its seven listed companies exceeding $218 billion.
Shares in Adani business units have soared up to 2,000 percent in the past
three years, adding more than $100 billion to its founder's net worth and
vaulting him up the ranks of the world's richest people.
Critics of the billionaire attribute his meteoric rise to a close association
with Hindu nationalist Prime Minister Narendra Modi and support for his
policies.
Hindenburg's report said there had been a pattern of "government leniency
towards the group" stretching back decades.
"We believe the Adani Group has been able to operate a large, flagrant fraud
in broad daylight in large part because investors, journalists, citizens and
even politicians have been afraid to speak out for fear of reprisal," the
report said.
Shares in flagship Adani Enterprises fell as much as three percent on
Wednesday, before recovering to trade 1.41 percent lower in the afternoon.
Other business units fell as much as 6.5 percent over the day's trade.