adani 60 is richest person afp

Adani shares plunge in India on fraud and stock manipulation complaints

Asia’s richest man, Gautam Adani, saw his net worth drop by six billion dollars on Wednesday after a US investment firm accused him of “blatant stock manipulation and accounting fraud”.

Adani, 60, is the third richest person in the world, with an estimated fortune of around $120 billion and interests ranging from Australian coal mines to India’s busiest ports.

But the mogul was the biggest loser on Forbes’ list of real-time billionaires on Wednesday, losing nearly five percent — or $6.4 billion — of his net worth overnight as investors rushed to sell stock in its group of companies.

Hindenburg Research released a report on Tuesday saying that Adani Group “has engaged in a blatant inventory manipulation and bookkeeping fraud scheme over the course of decades.”

The company said it took a short position in Adani Group companies after a two-year investigation based on interviews with former executives, site visits to multiple countries and document reviews.

Its report said Adani’s older brother Vinod “operates a vast maze 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 profit 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-up public offering – the largest ever in India – which opens for bidding on Friday and aims to bolster the business empire’s balance sheet.

“The report is a damaging combination of selective disinformation and stale, baseless and discredited allegations,” Adani Group chief financial officer Jugeshinder Singh said in a statement.

Singh added that the report was deliberately timed to undermine the conglomerate’s reputation “with the main aim of damaging the upcoming next public offering.”

“Afraid to Talk”

Adani Group is India’s second largest conglomerate, with the combined market capitalization of its seven listed companies exceeding $218 billion.

Shares of Adani’s business units have soared as much as 2,000% over the past three years, adding more than $100 billion to its founder’s net worth and propelling him among the richest people in the world.

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” that dates back decades.

“We believe that the Adani Group was able to carry out a large and flagrant fraud in broad daylight largely because investors, journalists, citizens and even politicians were afraid to speak out for fear of retaliation,” the report said.

Shares of flagship Adani Enterprises fell as much as three percent on Wednesday, before recovering to fall 1.41 percent in the afternoon.

Other business units were down as much as 6.5% on the trading day.