Gautam Adani Briefly Falls Out Of Top 20 Richest As His Net Worth Spirals After ‘Corporate Con’ Allegations

Topline

Indian billionaire Gautam Adani briefly fell out of the world’s top 20 richest people on Friday after losing $12 billion in a day, a spectacular fall from his former position as the world’s third-richest person as his sprawling corporate empire struggles to contain the escalating fallout triggered by allegations of fraud and stock manipulation.

Gautam Adani’s net worth has fallen since a short seller group alleged fraud in Adani Group … [+] companies

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Key Facts

Adani’s net worth briefly fell to around $58 billion on Friday morning, according to Forbes’ real-time tracker, later recovering to an estimated $62 billion.

The drop marked a loss of more than $10 billion in a day and temporarily pushed Adani below Walmart heirs Jim and Rob Walton and out of the list of the world’s 20 wealthiest people.

Adani—who only last week had been the richest person in Asia and the third-richest person in the world—is now 17th on Forbes’ list of the world’s richest people and the third-richest person in Asia, sitting behind India’s Mukesh Ambani and China’s Zhong Shanshan, respectively worth an estimated $82.9 billion and $69.2 billion.

Adani’s plummeting net worth comes as an ongoing market rout wipes billions from the value of listed companies within his eponymous corporate empire, Adani Group.

Shares in the group’s Adani Power and Adani Total Gas were down 5% on Friday afternoon, with Adani Green Energy and Adani Transmission both down 10%.

Shares of Adani Enterprises, the group’s flagship, and Adani Ports were up 1.4% and 7.9%, respectively, though these have fluctuated markedly during trading on Friday.

Forbes Valuation

$62 billion. That’s Adani’s estimated net worth, according to Forbes’ real time tracker. Adani’s fortune stems from infrastructure and commodities and he chairs the Adani Group, which has interests including ports and airports, real estate and energy. Adani’s net worth has halved in the ten days since Hindenburg Research revealed its short position against Adani Group on January 24. Before the revelation and strong market reaction, Adani was worth an estimated $126.4 billion and the third-richest person in the world. He now sits behind the likes of Amazon founder Jeff Bezos ($136 billion), Bill Gates ($106 billion), Michael Bloomberg ($76.8 billion) and Mark Zuckerberg ($76.6 billion).

What To Watch For

A large portion of Adani’s net worth stems from his stake in the Adani Group, which he chairs. The market volatility following Hindenburg’s allegations means the value of Adani Group’s listed companies, and therefore Adani himself, can alter significantly throughout the course of trading hours. These movements could knock Adani back out of Forbes’ list of the world’s 20 richest people. At the time of writing, only $2.4 billion stands between Adani and Julia Koch and Charles Koch, who are both worth an estimated $59.6 billion and tied for 20th place.

News Peg

The value of the Adani Group and of Adani himself have been in virtual freefall since U.S. short seller Hindenburg Research disclosed a short position against the conglomerate. In a report justifying its position, Hindenburg accused the Adani Group of operating “the largest con in corporate history.” It said the group was running a decades-long fraud scheme that involved “brazen accounting fraud, stock manipulation and money laundering.” The group has strenuously denied the allegations and invoked nationalist sentiment in India to defend itself, dismissing the report as an act of foreign sabotage against one of India’s biggest companies. Adani Group says it is weighing legal action against the activist investor group, something a nonplussed Hindenburg has dared the group to do in light of its “baseless” claims. The group canceled its latest $2.5 billion stock offering amid the chaos and the situation has spilled over and become a major political issue in India.

Big Number

$118 billion. That’s how much value has been erased from Adani Group companies’ market capitalization since Hindenburg released its report, according to Bloomberg. For some stocks, including Adani Enterprises, losses have exceeded 50%.