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NEWSMAKER-India’s Gautam Adani: Asia’s richest man in the eye of a storm

India’s Gautam Adani, the school drop-out turned billionaire who rose to become Asia’s richest man, faces possibly the biggest challenge of his career
after a U.S. short seller cast doubts on his business practices, hammering shares in his companies and his reputation.

January 28, 2023
By Shivam Patel and Aditi Shah and Aditya Kalra
28 January 2023

By Shivam Patel, Aditi Shah and Aditya Kalra

NEW DELHI, Jan 27 (Reuters) – India’s Gautam Adani, the
school drop-out turned billionaire who rose to become Asia’s
richest man, faces possibly the biggest challenge of his career
after a U.S. short seller cast doubts on his business practices,
hammering shares in his companies and his reputation.

Adani, whose home state is Gujarat in western India, built
his business empire from scratch after starting as a commodities
trader. India’s Prime Minister Narendra Modi hails from the same
state and their relationship has come under intense scrutiny by
Modi’s opponents for years.

Adani’s business empire grew rapidly and his wealth
ballooned. His interests span ports, power generation, airports,
mining, edible oils, renewable power and more recently media and

He rose to become the world’s third-richest person according
to Forbes, with a net worth of $127 billion, trailing only
Bernard Arnault and Elon Musk. Married to dentist Priti Adani,
he has two sons, Karan and Jeet, both of whom are involved in
the company businesses.

Despite his riches the 60-year-old, who comes from a
middle-class textile family, was far lesser known than other
billionaires in a country where many inherit their wealth.

His business style was described as “very hands on”,
according to one person with direct knowledge of his dealings.

As Adani’s empire swelled, stocks of his seven listed
companies surged – in some cases more than 1,500% in the last
three years amid aggressive expansion. He denied allegations by
Modi’s opponents that he had benefited from their close ties.

In a 2014 interview with Reuters, when asked if he was
friends with Modi, Adani said he had friends across the
political spectrum, but avoids politics.

He has said no one political leader is behind his success
and when asked about Modi’s use of Adani corporate planes during
the interview, Adani said Modi “pays fully”.

In recent years, the $220 billion Adani Group empire has
attracted foreign investment – France’s TotalEnergies,
for example, partnered with Adani last year to develop the
world’s biggest green hydrogen ecosystem.

More recently, Adani has taken a pro-active approach to
building his public image, giving interviews to local and
foreign media.

Appearing in a popular Hindi TV show this month called the
‘People’s Court’, Adani sat in a mock witness box inside a
courtroom setup and answered questions about his conglomerate –
offering an unusual level of scrutiny. He described himself as
“a shy person” and credited the rise of his popularity in part
to the political attacks he has faced.

Modi’s government has denied allegations of favouring

“People got to know who Adani (was) because of constant
targeting by Rahul ji during the 2014 elections and after that,”
Adani said, during the show, referring to opposition Congress
party leader Rahul Gandhi.

Three weeks later, shares of his group’s listed companies
plunged on Friday, taking their cumulative losses to $48 billion
this week. Short seller Hindenburg Research on Wednesday accused
Adani’s businesses of improper use of offshore tax havens and
flagged concerns about high debt. Adani has called the report
baseless, and said he was considering taking action.


Adani Group’s website says its vision is to balance “growth
with goodness” as it aims to build assets of national relevance
and transform lives through self-reliance and sustainability.

Adani is no stranger to controversies. The most recent was
months of protest by fishermen against construction of a
$900-million port in southern India’s Kerala, in which he sued
the state government and fishermen leaders. And in Australia,
environmental activists for years protested against Adani’s
Carmichael coal mine project in Queensland on concerns of carbon
emissions and damage to the Great Barrier Reef.

His latest challenge is how to deal with an unprecedented
share price rout as the group’s flagship firm Adani Enterprises
launched the country’s biggest public secondary share
offering this week, aiming to raise $2.5 billion.

The stock’s price on Friday fell well below the offer price,
casting doubts on its success.

Image guru Dilip Cherian told Reuters the Hindenburg Report
– and its fallout – could carry reputational risk for Adani but
he could take action to limit that damage and reassure investors
of the group’s financial and assets strength and ensure the
share sale is a success.

“In terms of the kind of stellar rise he has had this is a
hazard,” Cherian said.

Adani told India Today TV in December that people who were
raising questions about the group’s debt had not done a deep
dive into its financials, without saying who he was referring

As the market rout played out on Mumbai exchanges, Adani was
seen heading to a meeting at the federal power minister’s office
in New Delhi. It is not known what was discussed and Adani Group
did not respond to a request for comment on Friday.

Adani Group’s consolidated gross debt stands at $23.34
billion, Jefferies says. While Hindenburg alleged key listed
Adani companies had “substantial debt” which has put the entire
group on a “precarious financial footing”, the Adani Group has
repeatedly said its borrowings are manageable and no investor
has raised any concern.

(Reporting by Shivam Patel, Aditi Shah and Aditya Kalra in New
Delhi; Additional reporting by Nikunj Ohri in New Delhi and
Chris Thomas in Bengaluru; Editing by Elaine Hardcastle)

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