Billionaire Gautam Adani has slipped from being the world’s third richest man to the fourth, after an activist funding agency launched a report Tuesday accusing his firm, Adani Group, of “brazen” inventory manipulation and accounting fraud value $218 billion, wiping $919 million from his private internet value.

Hindenburg Research, which previously has shorted—or guess in opposition to—corporations like electrical truck maker Nikola Corp and Twitter, stated it holds quick positions in Adani corporations by U.S.-traded bonds and non-Indian-traded by-product devices.

Tuesday’s report despatched shares tied to seven of the Adani Group’s listed corporations falling by greater than 5% on Wednesday, taking a $10.8 billion hit, and forcing the corporate to subject a robust denial of its contents.

Below, what to find out about Adani and the company corruption allegations.

Who is Gautam Adani?

Gautam Adani is a self-made billionaire, and India’s richest man, with a internet value of roughly $118 billion as of April 2022. Much of this wealth was accrued in the course of the previous three years by his firm Adani Group, because the share costs of his key listed corporations climbed, pushing the billionaire’s rank to the third-richest man on this planet, behind Elon Musk and Jeff Bezos.

The industrialist started as a commodity dealer within the Nineteen Eighties earlier than he based his firm Adani Group in 1988, ultimately increasing it into a non-public infrastructure empire that operates ports, airports, and coal mines throughout India and the world. The group additionally has a number of subsidiaries by its information and cable facilities and the manufacturing of protection items. It plans to increase additional by a $70 billion funding in inexperienced power companies within the coming 12 months.

Read More: India’s Richest Man is Buying a Major TV Channel. It’s a Blow to Independent Media in the Country.

The firm’s success has usually been linked to profitable authorities concessions, due to Adani’s shut ties with India’s ruling Bharatiya Janata Party. In the previous, Adani has been a vocal supporter of Prime Minister Narendra Modi’s imaginative and prescient for a “self-reliant India.”

What do Hindenburg’s findings reveal?

Among different allegations, the report says that Adani Group engaged in inventory worth manipulation and accounting fraud over the course of many years, and located proof that the group’s key listed corporations fell in worth by 85% regardless of “sky-high valuations.” It additionally stated that substantial debt places the group on “precarious financial footing.”

The report names a number of members of the family—like Gautam Adani’s brothers, Rajesh and Vinod Adani, in addition to associates of the Adani Group—for his or her involvement in main bribery and tax evasion circumstances. Members of the Adani household have been the topics of previous corruption investigations carried out by the Securities and Exchange Board of India (SEBI) and the Directorate of Review Intelligence. The Hindenburg report additionally claims that Adani members of the family allegedly cooperated within the creation of offshore shell entities value $4.5 billion by cast paperwork, primarily in tax-haven jurisdictions like Mauritius, the UAE, and the Caribbean islands. Hindenburg stated that SEBI was nonetheless investigating a case in Mauritius in September 2022, however that no motion has been taken in opposition to the group to date.

Hindenburg stated the report’s findings had been primarily based on interviews with dozens of people, together with former senior executives at Adani Group, hundreds of paperwork, and due diligence web site visits in nearly half a dozen international locations.

How has the Adani Group responded to the allegations?

Adani Group’s chief monetary officer Jugeshinder Singh stated in an official statement the corporate was shocked by the report, calling it a “malicious combination of selective misinformation and stale, baseless, and discredited allegations.”

Adani Group didn’t deal with particular allegations in its official assertion however stated it has all the time been in compliance with the legislation. The conglomerate additionally stated that the timing of the report urged malicious intent to “undermine the Adani Group’s reputation with the principal objective of damaging the upcoming follow-on Public Offering from Adani Enterprises,” referring to the group’s plans for growing the quantity of freely traded shares.

The report was printed days earlier than bidding for a $2.5 billion inventory sale for Adani’s secondary shares begins Friday, which can include anchor investors just like the Abu Dhabi Investment Authority and Morgan Stanley.

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