Indian Richest Man, Adani Companies Shed $70 Billion in Market Value Amid Fraud Allegations

Companies of Gautam Adani, the richest man in India and Asia have shed a combined $70 billion in market value since Monday after a short seller Hindenburg Research, accused the Adani Group of fraud and irregularities.

In its report titled “Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History”, the New York-based investment company accused India’s largest conglomerate with an estimated market capitalisation of INR17.8 trillion or $218 billion of engaging in stock manipulation and accounting fraud over the course of decades.

This, Hindenburg Research supported by highlighting the extraordinary increase in Gautam Adani, the founder and Chairman of the Adani Group, net worth in the last three years.

Adani net worth rose by $100 billion in the last three years to $120 billion, largely through stock appreciation in the Group’s 7 key listed companies that grew by an average of 819% within the said period, Investors King reports.

“Our research involved speaking with dozens of individuals, including former senior executives of the Adani Group, reviewing thousands of documents, and conducting diligence site visits in almost half a dozen countries,” the report stated.

Hindenburg Research insisted that the group 7 key listed companies are overvalued by at least 85% while the Group is said to be enmeshed in substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing.

Also, the report pointed to the fact that the Group has been the focus of 4 major government fraud investigations, including money laundering, theft of taxpayer funds and corruption, totaling an estimated U.S. $17 billion.

The numerous allegations plunged the Group’s value as retail traders took sell positions on all companies owned by Adani Group in line with the report declaration.

Adani Share Sale

Despite the allegations and the decline reported in Adani Group’s key companies, the Group’s $2.5 billion share sale has recorded 85% subscription on Tuesday, an 82% jump from 3% on Monday.

A series of institutional investors have been buying into Adani’s vision in spite of the report and attributed the sell-off to retail investors with little to no understanding of investment.

United Arab Emirates (UAE) royals under the International Holding Co. invested about $400 million in Adani Enterprises Ltd., the unit-raising fund.

Gautam Adani Net Worth Dips $36 billion

Gautam Adani was the fourth richest man in the world before the report was published on January 24. Presently, he has lost a combined $36 billion in net worth.

He is presently the 11th richest man in the world with a net worth of $84.4 billion, according to Bloomberg Billionaires Index. In the last 24 hours, Adani lost over $8 billion. However, Adani is still the richest man in Asia and India.