New Delhi
CNN
–
The value of Gautam Adani’s business empire fell by more than $50 billion this week after US short-selling firm Hindenburg Research released a scathing report accusing him of fraud.
India’s Adani Group has condemned Hindenburg’s allegations as “baseless” and “malicious” and is considering legal action. But a steep sell-off in stocks that began Wednesday accelerated Friday after US hedge fund billionaire Bill Ackman said he found the short-seller report credible.
Hindenburg Research published an investigation on Adani Congress Late Tuesday, they accused him of “a decades-long scheme of massive stock fraud and accounting fraud.” He stated that he has taken a short position in Adani Group companies, which means that their prices will decrease.
Shares of those companies — some of which have risen more than 500% in the past few years — Indian stock markets fell at the open on Wednesday. The action resumed on Friday after trading resumed following the market break last Thursday.
Adani Transmission, Adani Total Gas and Adani Green Energy – three of the group’s seven listed companies – fell 20% each on Friday, while shares of Adani Enterprises, the conglomerate’s parent company, fell 18%. Friday’s losses wiped out nearly $39 billion in market value.
According to the Bloomberg Billionaires Index, Adani is still Asia’s richest man, with a personal fortune worth $113 billion, $30 billion more than Indian entrepreneur Mukesh Ambani. Friday’s loss narrows that gap.
Hindenburg said Thursday that he stood by the report and believed any legal action would be “futile.”
“If Adani is serious, it should also file a lawsuit in the US where we operate. We have a long list of documents to ask for in the legal inspection process,” said the short seller He said in a post on Twitter.
Hindenburg is not the first research firm to raise concerns about the finances of Adani’s sprawling empire, which has taken on $30 billion in loans from logistics to mining industries and is growing exponentially in sectors as diverse as media, data centers and airports. and cement.
Ackman weighed in on the debate Twitter He said on Thursday that he found the Hindenburg investigation to be “very credible and extremely well researched”.
Ackman added: “We do not invest long or short in any of Adani’s companies … nor do we conduct our own independent research.”
Hindenburg’s claims come at a sensitive time. Adani Enterprises plans to raise 200 billion rupees ($2.5 billion) by issuing new shares this month. Offer closes on Tuesday.
A college dropout and self-made industrialist, Adani is the fourth richest man in the world, ahead of Bill Gates and Warren Buffett. They are also seen as close allies of Indian Prime Minister Narendra Modi.
The 60-year-old tycoon founded the Adani Group 30 years ago.
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