News

Published: Feb 2, 2023
Updated: Feb 2, 2023

Adani Enterprises Stocks Plunge amid Fraud Allegations

Shares in Adani Enterprises, the flagship firm of business tycoon Gautam Adani, took a major hit on Wednesday as the conglomerate faced allegations of accounting fraud from short-seller Hindenburg Research. Despite a stock sale in the firm on Tuesday, Adani Enterprises stocks were down 30% on the Bombay Stock Exchange, wiping out around $92 billion of the conglomerate's listed units' value since last week. Adani Total Gas, in which French energy giant TotalEnergies owns 37.4%, also fell 10% and had to suspend trading.

Gautam Adani's Fortune Takes a Major Hit

The recent decline in Adani Enterprises' stocks has resulted in a significant drop in Gautam Adani's personal fortune, which has plummeted by over $40 billion in the past week. This has caused Adani to drop out of the top 10 of the real-time Forbes list and lose his title as Asia's richest man.

Allegations of Accounting Fraud and Stock Manipulation

Hindenburg Research has accused the Adani Group of artificially boosting its unit's share prices through offshore tax havens and accounting fraud. The US investment firm referred to the allegations as "the largest con in corporate history". The Adani Group has rejected these claims as "nothing but a lie" and a malicious attack on its reputation.

Oversubscribed Stock Sale Propped Up by Large Buyers

The follow-on public offering of Adani Enterprises was over-subscribed on Tuesday, with larger buyers such as tycoons Sajjan Jindal and Sunil Mittal propping up the share sale. However, smaller retail investors largely stayed away from the offering.

Adani Enterprises' Rapid Expansion and Soaring Shares

Adani Enterprises has seen a rapid expansion in the past five years, with its shares soaring by over 1000%. This has helped Gautam Adani become one of the world's richest men, ranking third behind Elon Musk and Bernard Arnault and family until last week. The Adani Group claims that Hindenburg's allegations and report are driven by a motive to "create a false market" and financial gains by dragging stock prices down