India’s Adani empire loses over $100 billion after fraud allegations
This has raised concerns about how Adani will raise new funds, with Adani’s dollar bonds trading at distressed levels and signs of contagion in Indian markets rising, Bloomberg reported.
The latest blow came after Adani on Wednesday evening called off a $2.5 billion share sale intended to help reduce debt levels – a long-standing concern – restore confidence and expand its shareholder base.
The show failed to attract “mom and dad” retail investors and was only sold thanks to large institutional buyers, other Indian tycoons and $400 million from IHC des United Arab Emirates.
Adani Enterprises’ board said in a statement that moving forward with the issue “would not be morally correct” and that it would refund all payments.
“Strong” fundamentals
Adani himself insisted in a video statement that “our business fundamentals are very strong, our balance sheet is healthy and our assets are strong.”
“Once the market stabilizes, we will review our capital market strategy,” he said, noting that his debt repayment record was “flawless.”
Adani, an advertising-shy 60-year-old high school dropout, has seen his operations grow at breakneck speed, with shares of Adani Enterprises soaring more than 1,000% in the past five years.
Until last week he was the third richest man in the world. By Thursday, he had slipped to 16th place on Forbes’ Realtime Rich list.
According to Hindenburg Research, Adani artificially boosted the share price of its units by funneling money into the stocks through offshore tax havens.
This “brazen stock manipulation and accounting fraud scheme” is “the biggest scam in the company’s history,” Hindenburg said.
Adani said he had been the victim of a “malicious and malicious” reputational attack and released a 413-page statement on Sunday which he said showed Hindenburg’s claims were “nothing but ‘a lie”.
Hindenburg, who makes money by betting on falling stocks, said in response that Adani failed to answer most of the questions raised in his report.
India’s Adani empire loses over $100 billion after fraud allegations
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