Gautam Adani's fall from the prestigious club of the planet's billionaires is just as spectacular as his rise:
In 32 days he's lost the $44 billion he'd earned in the past year.
And in total, the founder of the Adani Group conglomerate has seen his net worth deteriorate by more than $48 billion this year. It currently stands at around $72 billion, after a loss of $12 billion on Feb. 1, according to the Bloomberg Billionaires Index.
At $72 billion, Adani, 60, lost his crown as the richest man in Asia. It is now his countryman and rival, Mukesh Ambani, who becomes the richest man in Asia with a fortune estimated at $81 billion.
Adani's troubles are linked to the stock-market rout of his empire, Adani Group, which holds mines, ports, power plants and data centers in India. The conglomerate faced accusations of fraud, price manipulation and illegal practices launched by the New York short-selling investment firm Hindenburg Research.
Why Adani and the Group Are Falling
Hindenburg Research on Jan. 24 said that it had shorted stocks of the Adani conglomerate through U.S.-traded bonds and non-Indian-traded derivative instruments. This means that the New York-based investment firm, a well-known short-seller, is betting on a short-term drop in the prices of these equities.
The short-seller claims that the conglomerate has used shell companies in tax havens to boost its revenue and manipulate the stock prices of its various entities. The report describes a galaxy of shell entities based in the Caribbean, Mauritius and the United Arab Emirates controlled by the Adani family.
"We have uncovered evidence of brazen accounting fraud, stock manipulation and money laundering at Adani, taking place over the course of decades," Hindenburg wrote.
"Adani has pulled off this gargantuan feat with the help of enablers in government and a cottage industry of international companies that facilitate these activities."
Adani Group has rejected the allegations as baseless and has threatened to pursue all possible legal remedies in Indian courts. The conglomerate also went so far as to say that India was the target of Hindenburg.
"This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India," Adani Group said, in a 413-page report, on Jan. 29.
This defense has failed to convince investors. The entities that make up the Adani empire have thus lost a total of more than $90 billion in market capitalization in the five trading sessions since the release of the Hindenburg report.
What Does Adani Say About the Decline?
Adani's net wealth is tied to his stake in Adani Group.
The billionaire has not yet personally addressed the company's weeklong nightmare. He continues to act as if nothing had happened.
He notably tweeted a photo of himself shaking hands with Israeli Prime Minister Benjamin Netanyahu. According to Reuters, Adani Group had just finalized the takeover of the Port of Haifa in Israel for $1.15 billion.
"Privileged to meet with @IsraeliPM @netanyahu on this momentous day as the Port of Haifa is handed over to the Adani Group," the billionaire wrote. "The Abraham Accord will be a game changer for the Mediterranean sea logistics. Adani Gadot set to transform Haifa Port into a landmark for all to admire."
Adani, little known in the West, became a billionaire in 2008 after starting a commodity export firm. But his real rise came during the covid-19 pandemic.
Last year, he overtook, one after another, the regulars of the rankings of big fortunes like Warren Buffett and Bill Gates. He managed to dethrone Jeff Bezos from second place. The only person whose fortune had staved off Adani's rise had been Elon Musk, who clung to the title of the richest man in the world.
Adani had finished the year fourth. But his recent fall ejected him from the top 10.
