Adani Enterprises has cancelled its much-vaunted US$2.5bn share offer pitched to international investors following a damning investigation from infamous New York short sellers Hindenburg Research.
Founded by Asia’s (now second) richest man Gautum Adani, the Adani group of companies became the target of Hindenburg’s short-selling campaign following a two-year investigation into alleged fraud, stock manipulation and money laundering.
Gautam Adani has robustly denied all claims made in the 30,000-word report filed on January 24, but that has not stopped his Indian business empire from suffering massive losses on the market.
More than US$100bn has been wiped from the Adani group of companies, which includes the Adani Enterprises flagship, Adani Green Energy and Adani Transmission.
It could also impact the politically contentious Carmichael coal mine in Queensland, Australia, with the prospect of forced asset sales being raised in order to meet loan obligations.
Gautam Adani’s personal wealth has also plummeted. The world’s third-richest man prior to Hindenburg’s shock report, he has now fallen out of the top 10, according to Forbes.
Reliance Industries chair Mukesh Ambani has replaced Gautam Adani as India’s and Asia’s richest man.
Now Adani has been forced to ditch the highly anticipated share offer, which had drawn US$400mln worth of interest from Abu Dhabi-owned holding company IHG.
“Given these extraordinary circumstances, the company’s board felt that going ahead with the issue will not be morally correct,” Adani said. “Once the market stabilises, we will review our capital market strategy.”
In another blow, Citigroup's wealth arm has stopped accepting securities of the Adani group of companies as collateral for margin loans.