Bombay:
Billionaire Gautam Adani denied on Friday that his rise to become Asia’s richest man – a title he has lost in a phenomenal stock revolution – was due to Prime Minister Narendra Modi, as stocks in his conglomerate collapsed again.
The combined market capitalization of its listed units has collapsed by more than $100 billion since US short-seller Hindenburg Research — which makes money betting on falling stocks — released an explosive report last week.
It accused the Adani Group of accounting fraud and artificially inflated its share prices, calling it a “brutal stock manipulation and accounting fraud” and “the biggest scam in the company’s history”.
The group has refuted allegations that Adani’s close relationship with Prime Minister Modi, who is also from Gujarat state, has helped him win cases and avoid close scrutiny.
“These allegations are baseless,” Mr Adani told India Today channel on Friday, adding that their shared origins made him an “easy target” for such allegations.
“The fact is that my professional success is not due to an 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 halts en route to a fall of more than 20 percent.
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 reached their limits.
Mr. Adani himself has seen his fortune plummet by the tens of billions of dollars, dropping him from the real-time Forbes top 20 rich list, where he used to be third.
Late Wednesday night, his main firm canceled a $2.5 billion share sale intended to help reduce debt levels — long a concern — to restore confidence and broaden its shareholder base.
The issue failed to attract “mom and dad” retail investors and only sold out thanks to major institutional buyers, fellow Indian tycoons and $400 million from United Arab Emirates’ IHC.
The Adani Enterprises board said in a statement that proceeding with the matter “would not be morally correct” and that it would refund all payments.
Major banks, including Credit Suisse and Citigroup, no longer accept Adani bonds as collateral for loans to retail customers, according to Bloomberg News.
That fueled concerns about how Adani will raise new funds, with Adani dollar bonds trading at distressed levels and signs of contagion mounting in Indian markets, Bloomberg reported.
According to Hindenburg Research, Adani artificially inflated the stock prices of his units by funneling money into the stock through offshore tax havens.
The group had benefited from what it called a “decades-long pattern” of government leniency, and that “investors, journalists, citizens and even politicians were afraid to speak out for fear of reprisals”.
The Adani Group said it was the victim of a “malicious, mischievous” reputation attack and issued a 413-page statement on Sunday claiming Hindenburg’s claims were “nothing but a lie”.
Hindenburg said in response that Adani did not answer most of the questions in his report.
The Reserve Bank of India has asked lenders for details of their exposure to the Adani Group — whose holdings include ports, telecoms, airports, media and coal, oil and solar — Bloomberg reported, citing unnamed sources.
In his interview on Friday, Mr. Adani said that only 32 percent of his firms’ loans were owed to Indian banks, and nearly half of their debt was obtained through international bonds.
Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.
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