MUMBAI: Beleaguered Indian tycoon Gautam Adani denied Friday that his rise to become Asia’s richest man – a title he has lost in a phenomenal stock rout – was due to Prime Minister Narendra Modi, as shares in his conglomerate slumped again.

His listed units’ combined market capitalisation has collapsed by more than $100 billion since US short-seller Hindenburg Research – which makes money by betting on shares falling – released an explosive report last week.

It accused Adani of accounting fraud and artificially boosted its share prices, calling it a “brazen stock manipulation and accounting fraud scheme” and “the largest con in corporate history”.

Critics say Adani’s close relationship with Modi, who is also from Gujarat state, has helped him win business and avoid proper oversight.

“These allegations are baseless,” Adani told India Today television on Friday, adding that their shared origins made him an “easy target” for such claims.

“The fact of the matter is that my professional success is not because of any individual leader,” he insisted.

His comments came as shares in his flagship firm Adani Enterprises were repeatedly suspended on the Bombay Stock Exchange, hitting multiple trading stops on the way to falling by 25 percent.

Adani’s market losses top $100bn as crisis shockwaves spread

Adani Power, Adani Green Energy, Adani Total Gas – in which French giant TotalEnergies has a 37.4 percent stake – and Adani Transmission were also suspended when they hit their limits.

Share sale cancelled

Adani himself has seen his fortune plummet by tens of billions of dollars, dumping him out of the real-time Forbes rich list top 20, where he used to be third.

A 60-year-old publicity-shy school dropout, he has seen his operations expand at breakneck speed, with Adani Enterprises shares soaring more than 1,000 percent over the past five years.

But late Wednesday his main firm cancelled a $2.5-billion stock sale meant to help reduce debt levels – long a concern – restore confidence and broaden its shareholder base.

The issue failed to attract “mom and dad” retail investors and only sold out thanks to large institutional buyers, fellow Indian moguls and $400 million from the United Arab Emirates’ IHC.

The Adani Enterprises board said in a statement that going ahead with the issue “would not be morally correct” and that it would refund all payments.

Big banks including Credit Suisse and Citigroup have stopped accepting Adani bonds as collateral for loans to private clients, according to Bloomberg News.

That fuelled worries about how Adani will raise fresh funds, with Adani dollar bonds trading at distressed levels and signs of contagion in Indian markets increasing, Bloomberg reported.

According to Hindenburg Research, Adani has artificially boosted the share prices of its units by funnelling money into the stocks through offshore tax havens.

The group had benefitted from what it called a “decades-long pattern” of government leniency, and that “investors, journalists, citizens and even politicians have been afraid to speak out for fear of reprisal”.

Adani said it was the victim of a “maliciously mischievous” reputational attack and issued a 413-page statement on Sunday that it asserted showed Hindenburg’s claims were “nothing but a lie”.

Hindenburg said in response that Adani failed to answer most of the questions raised in its report.

Why is Gautam Adani’s Indian empire in turmoil?

Analysts say that the turmoil has hurt India’s image just as it seeks to woo overseas investors away from China.

India’s central bank has asked lenders for details of their exposure to the Adani Group – whose interests include ports, telecoms, airports, media and coal, oil and solar power – Bloomberg reported citing unnamed sources.

In his interview Friday, Adani said that only 32 percent of his firms’ loans were owed to Indian banks, with almost half their debt obtained through international bonds.

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SAMIR SARDANA Feb 03, 2023 07:27pm
AGAIN THE INDIAN DUDS DO NOT GET IT ! ADANI IS MR TEFLON WITH THE MIDAS TOUCH HE IS AN ARM OF THE GOI IN THE GUISE OF A PVT COMPANY.HE HAS THE FULL BACKING OF THE GOI AND THE INDIAN BANKS ! INDIAN BANKS WILL LEND TO ANYTHING THAT ADANI STARTS IN INDIA - AS AFTER THAT THE FIIs COME IN ! INFRA IS ALL OUT OF COST PADDING AND OVERINVOICING AND THAT CASH IS THEN ROUTED BACK INTO THE COMPANY,VIA PLACEMENTS OF STOCKS AND STOCK RISES.THIS IS NORMAL IN INDIA CHAIWALA HAS BUILT UP ADANI,TO REPLICATE THE SILK ROAD OF CHINA ,USING A PVT SECTOR COMPANY, WITH THE SOVERIGN BACKING OF THE GOI. THAT IS WHAT ADANI DID IN HAIFA AND LANKAN PORTS - AFTER BUILDING ,MASS IN ADANI PORTS IN INDIA ! SAME FOR ADANI GREEN AND TRANSMISSION - WHICH WILL ENTER, INTO AFRICA. AIM IS TO COUNTER CHINA - USING PVT SECTOR SKILLS,AND GOI MONEY AS AN EXAMPLE, CHAIWALA CALLED UP LANKAN PM,TO GET 2 WIND POWER PROJECTS, IN LANKA,FOR 1 GW EACH ! SO NOTHING WILL HAPPEN TO ADANI ! SAMIR SARDANA
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