Shares in the business empire of Asia’s richest man, Gautam Adani, nosedived yesterday, extending this week’s losses to US$45 billion, days after a US investment firm claimed that Adani Group had committed “brazen” corporate fraud.
Adani, 60, began his week as the world’s third-richest person, but has tumbled down the rankings to seventh on Forbes’ billionaire tracker after losing US$24 billion in yesterday’s trade.
His flagship Adani Enterprises plunged 15 percent in Mumbai, a fall of 508.45 rupees (US$6.24), triggering an automatic trading halt alongside five of its seven main listed subsidiaries.
Photo: AFP
“Obviously, this is panic-selling,” JM Financials equity research chief Ashish Chaturmohta said, adding that traders were creating fresh short-sell positions to protect previously made bullish bets on Adani stocks.
Hindenburg Research this week alleged in a report that Adani Group had used undisclosed related-party transactions and earnings manipulation to “maintain the appearance of financial health and solvency” of its listed business units.
The Indian conglomerate on Thursday said it was the victim of a “maliciously mischievous” reputational attack by Hindenburg just as it was preparing for a major fundraising round.
Hindenburg’s short position in the firm, announced in the report’s release, was proof that the company had a vested interest in driving down Adani stocks, Adani Group legal compliance officer Jatin Jalundhwala said in a statement.
Adani is exploring its punitive action against the research advisory in US and Indian courts, he added.
Hindenburg responded that Adani had ducked the issues its research had raised and instead resorted to “bluster and threats.”
“If Adani is serious, it should also file suit in the US,” the firm said in a statement. “We have a long list of documents we would demand in a legal discovery process.”
Shares in Adani business units have soared as much as 2,000 percent in the past three years, adding more than US$100 billion to its founder’s net worth and vaulting him up the ranks of the world’s richest people.
Adani, who has an estimated fortune of US$95 billion, is considered a close supporter of Indian Prime Minister Narendra Modi.
The report said a pattern of “government leniency towards the group” stretching back decades had left investors, journalists, citizens and politicians unwilling to challenge the group’s conduct “for fear of reprisal.”
“The issues strike at the heart of the Indian corporate sector scene where a number of family-controlled conglomerates dominate,” Global CIO Office CEO Gary Dugan said.
“By their very nature, they are opaque, and global investors have to take on trust the issues of corporate governance,” he said.
Hindenburg’s allegations come as an ambitious US$2.5 billion follow-on public offer — India’s largest ever — opened for bids yesterday, aimed at bolstering the business empire’s balance sheet.
Shares in Adani Enterprises fell to 2,720.90 rupees at their lowest point in the day, below the follow-on public offer price band of 3,112 to 3,276 rupees per share.
COMPETITION: AMD, Intel and Qualcomm are unveiling new laptop and desktop parts in Las Vegas, arguing their technologies provide the best performance for AI workloads Advanced Micro Devices Inc (AMD), the second-biggest maker of computer processors, said its chips are to be used by Dell Technologies Inc for the first time in PCs sold to businesses. The chipmaker unveiled new processors it says would make AMD-based PCs the best at running artificial intelligence (AI) software. Dell has decided to use the chips in some of its computers aimed at business customers, AMD executives said at CES in Las Vegas on Monday. Dell’s embrace of AMD for corporate PCs — it already uses the chipmaker for consumer devices — is another blow for Intel Corp as the company
STIMULUS PLANS: An official said that China would increase funding from special treasury bonds and expand another program focused on key strategic sectors China is to sharply increase funding from ultra-long treasury bonds this year to spur business investment and consumer-boosting initiatives, a state planner official told a news conference yesterday, as Beijing cranks up fiscal stimulus to revitalize its faltering economy. Special treasury bonds would be used to fund large-scale equipment upgrades and consumer goods trade-ins, said Yuan Da (袁達), deputy secretary-general of the Chinese National Development and Reform Commission. “The size of ultra-long special government bond funds will be sharply increased this year to intensify and expand the implementation of the two new initiatives,” Yuan said. Under the program launched last year, consumers can
Citigroup Inc and Bank of America Corp said they are leaving a global climate-banking group, becoming the latest Wall Street lenders to exit the coalition in the past month. In a statement, Citigroup said while it remains committed to achieving net zero emissions, it is exiting the Net-Zero Banking Alliance (NZBA). Bank of America said separately on Tuesday that it is also leaving NZBA, adding that it would continue to work with clients on reducing greenhouse gas emissions. The banks’ departure from NZBA follows Goldman Sachs Group Inc and Wells Fargo & Co. The largest US financial institutions are under increasing pressure
FUTURE TECH: Nvidia CEO Jensen Huang would give the keynote speech at this year’s Consumer Electronics Show, which is also expected to highlight autonomous vehicles Gadgets, robots and vehicles imbued with artificial intelligence (AI) would once again vie for attention at the Consumer Electronics Show (CES) this week, as vendors behind the scenes would seek ways to deal with tariffs threatened by US president-elect Donald Trump. The annual Consumer Electronics Show opens formally in Las Vegas tomorrow, but preceding days are packed with product announcements. AI would be a major theme of the show, along with autonomous vehicles ranging from tractors and boats to lawn mowers and golf club trollies. “Everybody is going to be talking about AI,” Creative Strategies Inc analyst Carolina Milanesi said. “From fridges to ovens
RSS