How billionaire’s empire lost $100b in days
Indian billionaire Gautam Adani has sought to reassure investors after his company pulled a surprise by calling off its share sale.
On Wednesday, Adani Enterprises said it would return $2.5 billion (Sh311b) raised from the sale to investors. The decision will not impact “our existing operations and future plans”, Mr Adani said.
The move capped an eventful week which began with a US investment firm making fraud claims against Adani group firms. Adani denies the allegations.
But the group’s companies have seen $108b wiped off their market value over the past few days. Adani himself lost $48b of his personal wealth, and is now 16th on the Forbes real-time billionaires list. Less than two weeks ago, Mr Adani was the world’s third richest man.
Shares of Adani Enterprises, the flagship company of his port-to-energy conglomerate, were due to go on sale on 25 January in India’s largest ever secondary share offering.
‘Brazen’ manipulation
But a day before that, US-based investment firm Hindenburg Research published a report accusing the Adani group of decades of “brazen” stock manipulation and accounting fraud.
Hindenburg specialises in “short-selling” - betting against a company’s share price in the expectation that it will fall. The group responded by calling the report “a malicious combination of selective misinformation and stale, baseless and discredited allegations”, but that wasn’t enough to stem investor fears.
Adani’s group has seven publicly traded companies which operate across a wide range of sectors, including commodities trading, airports, utilities, ports and renewable energy. Many Indian banks and state-owned insurance companies have either invested in or loaned billions of dollars to companies linked to the group.
