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Gautam Adani’s vast Indian business empire lost another billion dollars in value on Monday after it failed to reassure investors after rejecting widespread fraud claims.
The recession was triggered last week by a report by Hindenberg Research, a US investment group, alleging “decades of brazen stock manipulation and accounting fraud schemes.”
According to Bloomberg News, the three-day plunge has collectively reduced the market value of conglomerates by about $68 billion.
Adani Total Gas and Adani Green Energy plunged another 20% on Monday before trading stalled after suffering the same fate on Friday.
Adani Transmissions closed 14.91% lower, while the group’s flagship Adani Enterprises was up 4.21%.
The fire sale sees Adani, a school dropout-turned-magic considered close to Prime Minister Narendra Modi, slip from No. 3 on Forbes’ real-time rich list.
On Monday, the 60-year-old took eighth place in the rankings, taking his fortune to $88.2 billion, up from around $130 billion before the allegations.
He retained his crown as Asia’s richest person, but a volatile deal earlier in the day saw him briefly overtaken by fellow Indian tycoon Mukesh Ambani.
– “Madoff of Manhattan” –
The Adani conglomerate said it was the victim of a “viciously malicious” reputational attack and released a 413-page statement on Sunday that said it refuted Hindenburg’s allegations.
He called Hindenberg the “Madoff of Manhattan” after crooked investor Bernie Madoff, and said the researchers’ claims were “nothing but lies.” rice field.
“This is not simply an unjustified attack on a particular company, but a calculated attack on India, the independence, integrity and quality of Indian institutions, and India’s growth story and ambition.”
But most of Adani’s publicly traded companies were unable to stem the intense selling pressure, with Mr Hindenburg accusing him of “systematic looting of the country”.
The allegations came as Adani sought to raise an ambitious $2.5 billion stock sale. Despite Monday’s rise, Adani Enterprises’ share price remained well below his Rs 3,112-3,276 price range set in the offer, making it cheaper to buy in the market.
Investors subscribed to just 3% of follow-on public offerings (FPOs) scheduled to close on Tuesday at the end of Monday’s second day of auctions.
However, Abu Dhabi-based International Holding Company (IHC) said it would cast a vote of confidence in the group and buy one-sixth of the offered shares for $400 million.
In response to Adani’s statement, Hindenburg said, “India’s future is being thwarted by the Adani group, dressed in the Indian flag, while systematically looting the country.”
“In terms of content, Adani’s ‘page 413’ response contained only about 30 pages that focused on issues relevant to our report,” it said.
“The rest of the responses consisted of 330 pages of court records and 53 pages of high-level financial, general information, and unrelated corporate initiatives, such as how to encourage women entrepreneurship and safe vegetable production. It was detailed.”
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