The corporate conglomerate of Gautam Adani, Asia’s richest man, lost more than $50 billion in market value in two sessions, as the tycoon struggles to contain the fallout from a report by investment research firm Hindenburg Research, who accuses him of bad corporate practices, reported BBC News.
Adani Enterprises lost nearly 19% on Friday, the most since 2017. Some units including Adani Green Energy and Adani Total Gas slumped over the 20% daily cap, adding to a $12 billion selloff in companies. of the group on Wednesday.
The plunge is a response to Hindenburg’s report, issued on January 24, detailing extensive allegations of corporate malpractice following a two-year investigation into the mogul’s companies.
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Adani Group announced that it is exploring legal action following a “maliciously mischievous, uninvestigated” report from the research firm, while Hindenburg responded that he fully supports his report, adding that any legal action taken against him would be without merit.
Grupo Adani’s lawyers plan a detailed response to the report that they called “false,” according to bondholders who participated in a conference call with Adani executives. In the session, investors were told that the US-based short seller’s accounting fraud claims were “devoid of fact.”
The plunge in Gautam Adani shares follows impressive gains in recent years, including some of the biggest returns in Asia in 2022. The advance in recent years at Adani Enterprises has outpaced the likes of Elon Musk’s Tesla. , which led to Adani positioning himself as one of the richest men in the world, as high as second in his prime.
The current hit plunged Adani’s fortune below the $100 billion threshold that he crossed in April last year. According to Bloomberg, the fortune of the Indian businessman today stands at $92.7 billion dollars, which dropped him in the ranking of millionaires to position 7.
In August, CreditSights had already noted that Adani’s conglomerate was “deeply overleveraged” with “extended balance sheets.” And now with the Hindenburg report, the focus has turned to the group’s poor corporate governance.
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