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Stocks in Asia’s richest man Gautam Adani’s business empire fell again on Friday after accusing a US investment firm of alleging the conglomerate committed “brazen” corporate fraud.
Hindenburg Research reported this week that the Adani Group used undisclosed related-party transactions and earnings manipulation to “maintain the appearance of financial health and solvency” of its listed business units.
Shares of flagship Adani Enterprises have recovered to 2% after plummeting 6% at the opening of trading on the Mumbai Stock Exchange, the first session after the Republic Day holiday on Thursday.
Adani’s vast interests range from Australian coal mines to India’s largest port, with seven listed companies with a market capitalization of over $218 billion.
But on Wednesday, when trading resumed after the report was released, Adani stock fell sharply, wiping out $6 billion from its founder’s net worth and slipping from number one to number four on Forbes’ real-time global rich list. .
Adani said Thursday that he fell victim to a “malicious and malicious” reputational attack by Hindenburg just as he was preparing for a major funding round.
General Counsel Jatin Jalundhwala said in a statement that the conglomerate is seeking punitive action against the investigative recommendations in US and Indian courts.
Hindenburg replied that Adani sidestepped the issues raised in the study and instead resorted to “laughter and threats.”
“If Adani is serious, he should file a lawsuit in the United States,” the company said in a statement. “I have a long list of documents that I request in the legal discovery process.”
The stock price of Adani’s business unit has soared by 2,000% over the past three years, increasing the founder’s net worth by more than $100 billion and propelling him into the ranks of the world’s richest people.
Now with an estimated fortune of around $120 billion, Adani is seen as a close supporter of Prime Minister Narendra Modi.
The Hindenburg report accused the Adani Group of being involved in “decades of brazen stock manipulation and fraudulent accounting schemes.”
It claimed that Adani’s older brother, Vinod, managed a “vast maze of offshore shell entities” in tax havens that included Mauritius, Cyprus and several Caribbean islands.
The report said decades of patterns of “government leniency towards the group” made investors, journalists, citizens and politicians unwilling to challenge the group’s actions “for fear of retaliation.” Stated.
The claim comes ahead of an ambitious $2.5 billion follow-up public offering, the largest in India’s history, which opened for tender on Friday and aims to strengthen the business empire’s balance sheet.
Guru/Dan
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