NEW DELHI, Jan 27 (Reuters) – India’s Gautam Adani, the varsity drop-out turned billionaire who rose to turn out to be Asia’s richest man, faces probably the most important problem of his profession after a U.S. brief vendor forged doubts on his enterprise practices, hammering shares in his firms and his fame.

Adani, whose house state is Gujarat in western India, constructed his enterprise empire from scratch after beginning as a commodities dealer. India’s Prime Minister Narendra Modi hails from the identical state and their relationship has come underneath intense scrutiny by Modi’s opponents for years.

Adani’s enterprise empire grew quickly and his wealth ballooned. His pursuits span ports, energy era, airports, mining, edible oils, renewable energy and extra just lately media and cement.

He rose to turn out to be the world’s third-richest particular person based on Forbes, with a internet value of $127 billion, trailing solely Bernard Arnault and Elon Musk. Married to dentist Priti Adani, he has two sons, Karan and Jeet, each of whom are concerned within the firm companies.

Despite his riches the 60-year-old, who comes from a middle-class textile household, was far lesser identified than different billionaires in a rustic the place many inherit their wealth.

His enterprise type was described as “very hands on”, based on one particular person with direct information of his dealings.

As Adani’s empire swelled, shares of his seven listed firms surged – in some circumstances greater than 1,500% within the final three years amid aggressive growth. He denied allegations by Modi’s opponents that he had benefited from their shut ties.

In a 2014 interview with Reuters, when requested if he was buddies with Modi, Adani mentioned he had buddies throughout the political spectrum, however avoids politics.

He has mentioned nobody political chief is behind his success and when requested about Modi’s use of Adani company planes through the interview, Adani mentioned Modi “pays fully”.

In latest years, the $220 billion Adani Group empire has attracted overseas funding – France’s TotalEnergies (TTEF.PA), for instance, partnered with Adani final 12 months to develop the world’s largest inexperienced hydrogen ecosystem.

More just lately, Adani has taken a pro-active method to constructing his public picture, giving interviews to native and overseas media.

Appearing in a well-liked Hindi TV present this month known as the ‘People’s Court’, Adani sat in a mock witness field inside a courtroom setup and answered questions on his conglomerate – providing an uncommon stage of scrutiny. He described himself as “a shy person” and credited the rise of his recognition partially to the political assaults he has confronted.

Modi’s authorities has denied allegations of favouring Adani.

“People got to know who Adani (was) because of constant targeting by Rahul ji during the 2014 elections and after that,” Adani mentioned, through the present, referring to opposition Congress get together chief Rahul Gandhi.

Three weeks later, shares of his group’s listed firms plunged on Friday, taking their cumulative losses to $48 billion this week. Short vendor Hindenburg Research on Wednesday accused Adani’s companies of improper use of offshore tax havens and flagged considerations about excessive debt. Adani has known as the report baseless, and mentioned he was contemplating taking motion.

REPUTATION CHALLENGE

Adani Group’s web site says its imaginative and prescient is to steadiness “growth with goodness” because it goals to construct belongings of nationwide relevance and remodel lives by means of self-reliance and sustainability.

Adani is not any stranger to controversies. The most up-to-date was months of protest by fishermen towards building of a $900-million port in southern India’s Kerala, through which he sued the state authorities and fishermen leaders. And in Australia, environmental activists for years protested towards Adani’s Carmichael coal mine venture in Queensland on considerations of carbon emissions and injury to the Great Barrier Reef.

His newest problem is methods to cope with an unprecedented share worth rout because the group’s flagship agency Adani Enterprises (ADEL.NS) launched the nation’s largest public secondary share providing this week, aiming to lift $2.5 billion.

The inventory’s worth on Friday fell nicely under the supply worth, casting doubts on its success.

Image guru Dilip Cherian informed Reuters the Hindenburg Report – and its fallout – might carry reputational danger for Adani however he might take motion to restrict that injury and reassure traders of the group’s monetary and belongings energy and make sure the share sale is successful.

“In terms of the kind of stellar rise he has had this is a hazard,” Cherian mentioned.

Adani informed India Today TV in December that individuals who had been elevating questions concerning the group’s debt had not carried out a deep dive into its financials, with out saying who he was referring to.

As the market rout performed out on Mumbai exchanges, Adani was seen heading to a gathering on the federal energy minister’s workplace in New Delhi. It shouldn’t be identified what was mentioned and Adani Group didn’t reply to a request for touch upon Friday.

Adani Group’s consolidated gross debt stands at $23.34 billion, Jefferies says. While Hindenburg alleged key listed Adani firms had “substantial debt” which has put all the group on a “precarious financial footing”, the Adani Group has repeatedly mentioned its borrowings are manageable and no investor has raised any concern.

Reporting by Shivam Patel, Aditi Shah and Aditya Kalra in New Delhi; Additional reporting by Nikunj Ohri in New Delhi and Chris Thomas in Bengaluru; Editing by Elaine Hardcastle

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