Gautam Adani, the richest man in Asia and India, had a dramatic decline in his wealth on Friday, as he dropped to seventh place on the list of the world’s wealthiest people. In the first trading hours of Friday, 27th January 2023, Adani’s fortune decreased by more than $22 billion to around $97 billion, according to the Forbes Real Times Billionaire Index. Bill Gates, the pioneer of Microsoft, who had a wealth valued at $104 billion, is now ranked above Adani.
When the Adani Group Stock prices experienced a significant surge last year, Adani climbed to the second spot on the rich list. He held on to the third place for a while before being recently supplanted ($122 billion) by Amazon founder Jeff Bezos. With a fortune of $215 billion, Bernard Arnault of Louis Vitton leads the list of the wealthiest people, followed by Elon Musk, the owner of Tesla, SpaceX, and Twitter, whose wealth was recently estimated at $170 billion.
As the conflict between the Adani Group and the US-based activist investor group Hindenburg Research heated up on Thursday, Gautam Adani’s position on the wealth list dropped as a result of the drop in share prices of Adani Group firms, which dropped by up to 20% on Friday.
The Hindenburg Research report on Adani Group
US-based activist investor Hindenburg Research has claimed in a report that Adani Group was involved in a “brazen stock manipulation and accounting fraud scheme over the course of decades.” Hindenburg Research claimed that it has conducted an investigation on the company for the last two years and that it has documents to prove its claims.
The group also accused the company of improper use of offshore tax havens and said that the company’s debt is very high. Hindenburg Research Report accused Adani family members of creating and managing “a vast labyrinth of offshore shell entities” in tax havens like Mauritius, Cyprus, and the UAE. The report claimed that some of these entities were used for market manipulation. Moreover, the report has also alleged over-invoicing in coal import by Adani group companies, along with other private and public sector companies.
The group claimed that the research involved interviewing multiple individuals, including former senior executives of the Adani Group, examining thousands of documents, and conducting due diligence site visits in nearly a dozen countries, Hindenburg Research said.
“Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its seven key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations,” said the forensic financial research company in its report. This report was published on 24th January 2023.
Adani Group issues rebuttal, Hindenburg stands by its claims
On Wednesday, 25th January 2023, the Adani Group trashed the Hindenburg Research report as a ‘malicious combination of selective misinformation and stale, baseless and discredited allegations’. The Group stocks lost Rs 46,000 crores in market cap after Hindenburg claimed that the Indian giant had participated in a clear stock manipulation and accounting fraud scheme over decades.
Media statement on a report published by Hindenburg Research. pic.twitter.com/ZdIcZhpAQT
— Adani Group (@AdaniOnline) January 25, 2023
The Adani Group said in its media statement, “We are shocked that Hindenburg Research published a report on 24 January 2023 without making any attempt to contact us or verify the factual matrix. The report is a malicious combination of selective misinformation and stale, baseless, and discredited allegations that have been tested and rejected by India’s highest courts.” However, despite the response given by the group, the price of the Adani Group shares kept falling resulting in the sharp decline of Gautam Adani’s position in the world’s richest people’s list.
However, Hindenburg Research has stood by its report, claiming it has all the documents needed to prove its charges. They have also challenged Adani Group to file a lawsuit against them in the USA. In a statement issued on Twitter, it said, “In the 36 hours since we released our report, Adani hasn’t addressed a single substantive issue we raised. At the conclusion of our report, we asked 88 straightforward questions that we believe give the company a chance to be transparent. Thus far, Adani has answered none of these questions.”
Our response to Adani: pic.twitter.com/6NcFKR8gEL
— Hindenburg Research (@HindenburgRes) January 26, 2023
Claiming that Adani has resorted to bluster and threats instead of answering questions, they said that they welcome the threat of legal action by Adani Group, but wanted the case to be filed in US.
“If Adani is serious, it should also file suit in the U.S. where we operate. We have a long list of documents we would demand in a legal discovery process,” Hindenburg Research said.
