India’s and Asia’s richest billionaire Gautam Adani’s fortune sharply declined on Friday and his ranking in the global rich list came down to 4th spot following a report by Hindenburg Research that claimed that Adani Group had participated in a clear stock manipulation and accounting fraud scheme over decades.
According to the Bloomberg Billionaires Index, Adani's wealth fell by over $7 billion to $113 billion.
Hindenburg said that the moves pushed up stock prices in seven key listed companies under the Adani Group, which in turn helped boost the industrialist's net worth by over $100 billion in three years.
According to the Bloomberg Billionaires Index, Adani's net worth soared over 50 percent in 2022. At the start of the previous year, Adani was on the 14th spot on the Bloomberg index and by the end of the year, he rose to the third spot with $121 billion, surpassing Bill Gates and Warren Buffett.
Despite the fall, Adani is still Asia's wealthiest person and the fourth richest person in the world after LVMH boss Bernard Arnault, Elon Musk, and Jeff Bezos.
According to the report, Gautam Adani, the founder and chairman of the Adani Group, increased his net worth by over $100 billion in the last three years primarily as a result of stock price growth in the group's seven most important publicly traded companies, which have increased by an average of 819 percent during that time.
For two years, the forensic financial research firm had been conducting its investigation.
Numerous people, including former Adani Group senior executives, were interviewed for the research, thousands of documents were examined, and due diligence site visits were made in close to a dozen different nations.
"Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its seven key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations," said the forensic financial research company in its report.
The key listed Adani companies have also incurred significant debt, notably by pledging shares of their inflated stock as collateral for loans, placing the group's overall financial situation in risk.
The Adani Group has reportedly been the subject of four significant government fraud investigations that have been estimated to have cost US$ 17 billion in total and have included allegations of money laundering, theft of tax dollars, and corruption.
"Adani family members allegedly cooperated to create offshore shell entities in tax-haven jurisdictions like Mauritius, the UAE, and Caribbean Islands, generating forged import/export documentation in an apparent effort to generate fake or illegitimate turnover and to siphon money from the listed companies," said Hindenburg Research in its report.
Post the report, on Friday, five Adani Group stocks namely Adani Enterprises, Adani Total Gas, Adani Transmission, Adani Green Energy, and Adani Ports & SEZ hit lower circuits.
Reacting to the report on Wednesday, Adani Group released a media statement where the company said that it was shocked that Hindenburg Research has published a report without making any attempt to contact the company or verify the factual matrix.
"The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India's highest courts," said the company in a report.
Meanwhile, Hindenburg Research said it fully stands by its report and believes any “legal action taken against us would be meritless”.
“Regarding the company’s threats of legal action, to be clear, we would welcome it. We fully stand by our report and believe any legal action taken against us would be meritless,” said Hindenburg Research in a statement that was posted on its official Twitter handle.