Gautam Adani Slips From Top 5 Richest As His Net Worth Plummets After ‘Corporate Con’ Accusations

Topline

Indian billionaire Gautam Adani fell out of the world’s top five richest people on Friday as he fights allegations of fraud and Adani Group shares plummet following a damning report by U.S. short seller Hindenburg Research on his corporate empire.

Adani Group Chairman, Gautam Adani, has been overtaken as the world’s fourth-richest person.

AFP via Getty Images

Key Facts

Shares of Adani Group companies fell sharply on Friday, with several of the group’s listed companies hitting their lower circuit limits, the lowest price a stock can hit on a given day.

Shares in the group’s flagship, Adani Enterprises, were down more than 18% on Friday afternoon, Adani Power 5%, Adani Ports more than 15% and Adani Total Gas, Adani Green Energy and Adani Transmission all down the maximum 20%.

The selloff has wiped billions in market value and nearly a fifth of his net worth in a day—Forbes estimated Adani was worth $119.3 billion as of 5 p.m. EST on Thursday—meaning Adani is no longer one of the five richest people in the world.

Adani, who Amazon founder Jeff Bezos overtook as the world’s third-richest person on Wednesday, is now the world’s seventh-richest person, Forbes estimates, his personal fortune now eclipsed by tech magnate Larry Ellison ($112.8 billion), investing guru Warren Buffett ($107.8 billion) and Microsoft cofounder Bill Gates ($104.1 billion).

Adani is still the richest person in Asia—ahead of Reliance Industries chair Mukesh Ambani, who Forbes estimates is worth $83.3 billion—and remains the only person in the world’s top 10 richest people to be based outside of Europe or North America.

Forbes Valuation

$98.1 billion. That’s Adani’s estimated net worth, according to Forbes’ real time tracker. Large parts of Adani’s fortune stem from infrastructure and commodities. He chairs the Adani Group, which has interests including ports, airports, real estate, energy—Adani has vowed to invest heavily in green energy—and cement. It controls India’s largest port and is one of the country’s biggest airport operators.

Key Background

The fortunes of both Adani and the Adani Group have been in flux since Hindenburg Research disclosed a short position against the group’s companies. In a lengthy report, Hindenburg lobbed a litany of blistering accusations at the Adani Group, alleging a decades-long fraud scheme, “brazen accounting fraud, stock manipulation and money laundering” and “the largest con in corporate history.” The group has strenuously denied the allegations, dismissed the report as the work of a foreign investment firm trying to sabotage one of India’s biggest companies and says it is weighing legal action against the activist investor group. Nonplussed, Hindenburg has dared Adani to sue and dismissed the group’s accusations as “baseless.”

Tangent

According to Reuters on Friday, citing two sources familiar with the matter, India’s market regulator has upped scrutiny of Adani Group deals over the last year. The regulator is studying Hindenburg’s report to inform its own preliminary investigation, Reuters reported.

What To Watch For

The stock freefall comes as Adani is due to launch a key share sale on Friday. Flagship Adani Enterprises planned to raise $2.4 billion and show the firm can attract international investors.