The shaken empire of Indian billionaire Adani

The fall is dizzying. In less than a week, the fortune of Gautam Adani, the richest man in India and close to Prime Minister Narendra Modi, has melted. The magnate lost in a few days 34 billion dollars (31.2 billion euros) – out of nearly 120 billion dollars a week ago -, falling from fourth to eleventh place in the world, according to the index Billionaires Bloomberg.

Attacked on the stock market since Friday, January 27, he still managed to complete, Tuesday, January 31, the largest fundraising in the history of India for 2.5 billion dollars. It was saved in extremis by the support of major institutional investors.

It is a report by Hindenburg Research published on January 24 which started the storm. The 106-page document claims that Mr Adani has grown his empire – whose business ranges from infrastructure to energy to cooking oil – thanks to a fraud. Hindenburg describes the conglomerate’s practices as “biggest scam in business history” and accuse him of “brazen accounting fraud, stock manipulation and money laundering”.

This American investment research firm and short seller (that is to say, which bets on the decline in the markets), is known to have revealed in 2020 manipulations which led to the indictment of the leaders of the manufacturer of Nikola electric vehicles.

An “attack on India”

Hindenburg’s investigation claims that the Indian tycoon’s older brother, Vinod Adani, is managing “a vast maze of offshore entities”. These “front companies” located in Mauritius but also in Cyprus, the United Arab Emirates, Singapore and several Caribbean islands would have collectively transferred billions of dollars in companies listed on the Adani Stock Exchange, in particular in order to believe in their good financial health.

The group would also have benefited from the ” corruption “ of “multiple levels of government”including India’s stock market watchdog, the Securities and Exchange Board of India (SEBI).

Gautam Adani had a meteoric rise. In three decades, the autodidact, son of a textile trader, who had stopped his studies at the age of 16 to work for a diamond dealer in Bombay, finds himself at the age of 60 at the head of a family conglomerate of around 222 billion of dollars.

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In 2022, he briefly robbed Jeff Bezos of being the second richest man on the planet. In just three years (since 2020), fortune of the Indian billionaire went from 20 billion dollars to around 120 billion. An increase due in part to the appreciation in the share prices of the group’s seven main listed companies which rose by 819% on average over this period, according to Hindenburg.

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