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The meteoric fall of India’s Rockefeller

The meteoric fall of India’s Rockefeller

The spectacular fall this week of the fortune of the Indian billionaire Gautam Adanipresident of the conglomerate Adani Groupafter serious accusations of fraud on the eve of a massive stock market operation led to what until eight days ago was the richest man in Asia to a slope that sinks its riches.

In a matter of a week, Adani stumbled up the list of the world’s richest men, going from third to fifth in one day, and from there to eighth, eleventh, twelfth, fifteenth, to sixteenth today, according to the Forbes list, pushed by a devaluation of his fortune of almost US$ 60,000 million.

Eight days ago, his wealth was valued at more than $120 billion.

Adani Enterprise, the flagship company of the multinational conglomerate, accumulated a depreciation of 53.8% in the last eight days with shares falling from 3,388.95 rupees last week, about US$ 41.22, to 1,565.30 rupees (19.04) at the end of the month. today, according to data from the Indian Stock Exchange (NSE).

The collapse of the shares represents an estimated loss of more than US $ 90,000 million in the total valuation of the group, an unexpected twist for the magnate who just a week ago was in charge of what would be the largest secondary offer operation on the stock market. from India.

The fall

A report by the US investment group Hindenburg Research published on January 25 accused Adani of carrying out a “blatant scheme of stock manipulation and accounting fraud over decades”giving support to rumors that have fueled mistrust of the Indian market for years.

According to the two-year investigative report, based on interviews with former conglomerate executives and extensive documents, Adani added most of his fortune through stock price appreciation in the group’s seven key companies, “increased an average of 819% in that period”.

The tycoon’s fortune took an impressive leap between 2019 and 2022, when it went from US$8.9 billion to more than US$100 billion, in its best days last year.

With Adani Group preparing to go public in a $2.5 billion secondary share sale, research published two days before the massive deal left the Indian businessman up in arms, with shares falling since opening.

The three-day trade remained in the red, with all seven companies in the group losing less than 5% of subscriptions, and Adani struggling to placate a volatile market.

The conglomerate saved in the last day with 100% of the subscriptions, after an acquisition of the Emirati International Holding Company (IHC) for US$ 400 million, which was followed by an apparent enthusiasm from investors, and a total sale of approximately US $2 billion.

Despite this, almost at midnight yesterday, one day after the closing of the offer, Adani with a video message announced the cancellation of the entire operation and the return of the funds to the investors, alleging that “going ahead with the broadcast would not be morally correct”.

The market responded with more losses.

The other son of Gujarat

Like Indian Prime Minister Narendra Modi, Adani hails from the western state of Gujarat, which led them to cross paths before they both rose to the top.

The billionaire began expressing sympathy and support for the Hindu nationalist leader and his formation, the BJP, since Modi was head of government in his home state and Adani’s fortune was less than a tenth of what it is today.

With no interest in studying, the Indian tycoon abandoned school and the chances of working in his father’s textile business to start his own businesses at a very young age.

In 1988 he would found his first company, what is today the Adani Group, as a trading company that soon expanded to import and export goods, and later to develop its own ports.

With the privatization of the ports, and Modi’s rise to power in the background, Adani’s rise became unstoppable, with companies in renewable energy, coal, gas, infrastructure, and recently the press.

The acquisition in another controversial financial operation of the Indian television channel NDTV, considered by Modi’s detractors as the last great independent media in the country, is seen as a favor from the billionaire to contain criticism against the Indian prime minister with an eye on next year’s general elections.

Adani Group has already been the focus of corruption investigations and accusations in the past. In 2012, a leaked report by the Auditor General (CAG) accused the Gujarat government, led by Modi, of favoring some of the country’s big industrialists, including Gautam Adani and Mukesh Ambani of Reliance Industries.

(With information from EFE)

Source: Gestion

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