Shares in the Indian tycoon Gautam Adani‘s flagship firm nosedived again on Wednesday as its owner dropped out of the Forbes top 10 rich list following allegations of massive accounting fraud.
Adani Enterprises stocks were down 30 percent on the Bombay Stock Exchange minutes before the bourse’s scheduled close, their fifth straight day of losses.
The rout has wiped out around $92 billion of the value of the conglomerate’s listed units since last week, Bloomberg News said.
Adani’s personal fortune has plummeted by more than $40 billion in the same period, according to the real-time Forbes list, dropping him out of the top 10 and below fellow Indian Mukesh Ambani.
This meant Adani was no longer Asia’s richest man.
Adani Total Gas — in which French giant TotalEnergies owns 37.4 percent — dropped another 10 percent on Wednesday, forcing the Bombay Stock Exchange to suspend trade in the stock soon after the market’s open.
The sudden sharp drop in Adani Enterprises on Wednesday afternoon came despite a stock sale in the firm on Tuesday that was oversubscribed.
Smaller retail investors largely steered clear from the follow-on public offering, however.
Large buyers instead propped up the share sale, including fellow Indian tycoons Sajjan Jindal and Sunil Mittal, Bloomberg News reported, citing unidentified sources.
School dropout
School dropout Adani, 60, has seen his empire expand at breakneck speed, with Adani Enterprises shares soaring by more than a thousand percent in the past five years.
This helped make him, until last week, the world’s third-richest man behind Elon Musk and Bernard Arnault and family.
According to US investment group Hindenburg Research, Adani has artificially boosted the share prices of its units by funnelling money into the stocks through offshore tax havens.
This “brazen stock manipulation and accounting fraud scheme” is “the largest con in corporate history”, Hindenburg said in its explosive report issued last week.
Adani said it was the victim of a “maliciously mischievous” reputational attack and issued a 413-page statement on Sunday that said Hindenburg’s claims were “nothing but a lie”.
Hindenburg, which makes money by betting on stocks falling, said in response that Adani’s statement failed to answer most of the questions raised in its report.
Opposition heckles
Critics say Gautam Adani’s closeness to Prime Minister Narendra Modi has helped him win business and avoid proper regulatory oversight.
Modi, who like Adani is from Gujarat state, has not commented publicly since the Hindenburg claims, which analysts say has hurt India’s image for overseas investors.
The firm’s many interests include ports — the firm took control of one of Israel’s biggest this week — airports, media and energy, both in coal and solar.
India’s opposition Congress party called this week for a “serious investigation” by the central bank and regulator into Adani’s firms following the Hindenburg allegations.
“For all its posturing about black money, has the Modi government chosen to turn a blind eye towards illicit activities by its favourite business group?” Congress said.
Opposition lawmakers mockingly chanted “Adani! Adani” on Wednesday as Finance Minister Nirmala Sitharaman talked about ports during a budget speech.
