The proverbial phrase, “The higher you climb, the harder you fall,” couldn’t be more fitting for India business mogul Gautam Adani, who saw half of his wealth vanish after New York based short seller Hindenburg Research accused Mr. Adani of “pulling the largest con in corporate history.”
The scathing report alleges his company of “brazen” accounting fraud and stock manipulation and also leveled 88 questions at the Indian conglomerate, asking about the group’s debt levels, accusing it of using known tax havens, and claiming the ultimate goal was to inflate the market value of Adani’s listed companies.
The Adani Group’s stock had surged in value by 2,500 per cent over the last five years which raised some eyebrows in his country and abroad, considering his close ties with the Indian government. He equated his gains with India’s rapid economic growth, linking his success story with that of his nation.
According to BBC News, the report questioned the Adani Group’s ownership of companies in offshore tax havens such as Mauritius and the Caribbean which helped inflate the actual market value of his companies. It also claimed Adani companies had “substantial debt” which put the entire group on a “precarious financial footing.”
The former richest man in Asia denied these allegations but Hindenburg Research rebutted it stating, “fraud cannot be obfuscated by nationalism.”
What surprised the investor and market was the sheer pace he rose to the third richest man on the plant. His net worth in January 2020 accounted for a total of $10 billion and by September 2022, it accumulated to jaw dropping $152.2 billion, according to Forbes.
The billionaire, whose wealth surged by over $60 billion in 2022 alone, has witnessed a thirteen-fold jump in his fortune in a little over two and half years.
Analysts point out that one of the reasons for such blinding pace is his political romance with the Prime Minister, Narendra Modi.
When the Indian government approved the privatization of six airports in 2018, it relaxed the rules to include more companies for competition, allowing companies without any experience in the sector to bid. There was one clear winner from the rule change: Gautam Adani, the billionaire industrialist with no history of running airports, scooped up all six, despite the finance ministry raising objection to it.
When Mr. Modi took office, he flew from Gujarat to the capital New Delhi in Mr Adani’s private jet — an open display of friendship that symbolized their symbiotic relationship.
According to The Hindu, in 2014, when Modi came to power, he was in 609th spot on the list of richest people with a total net worth of less than $8 billion. It peaked at $152 billion in 2022 before the exposé.
Whether it’s the airport tenders, energy companies, shipping ports or defense deals, he was always given preferential treatment from the incumbent government. Under the government protective shade and the spicy touch of nationalism, he flew past undetected under the corporate surveillance radar, but his unrestricted climb turned into a free fall when the market course corrected itself.
