Right from his childhood, Gautam Adani exhibited entrepreneurial traits. Many Indians may not know he is a college dropout who gave up routine studies to start a business venture. In a family of six other siblings, his parents struggled to live well.
Quite in his teens, Gautam had come away to Mumbai to work as a diamond sorter. That first job lasted only 2-3 years. But by then, he had picked most of the subtle tricks of the trade particularly the manner market forces changed and affected the moneymaking dynamics. His keen sense of sniffing money even in the wilderness helped him set up a diamond brokerage outfit. By 1982 when he was only 20, he had bagged a million rupees. But the real big turning point happened when his brother Mahasukh Adani persuaded him to return to Ahmedabad and help him in the plastic factory he had newly set up. Gautam joined his brother and fortune smiled on him so widely as to make him a very big polyvinyl chloride importer to India.
Reportedly, goons had kidnapped Adani in 1998 at gunpoint for ransom. They released him later, believably after getting paid. Coincidentally, Adani also had a close encounter with the 26/11 terror attacks while dining at the Taj Hotel. The staff helped him hide in a basement.
Adani has a unique knack to recognise an opportunity knocking at the door. In the 1990s, he made the most of an unrealistically-growing market in India. Harshad Mehta, his contemporary money sniffer, was a false one. But Adani was a real money locator. Not only he made great hay when the sun kept shining but also diversified quickly to capture all the emerging markets unfailingly.
Gautam founded the Adani group in 1988, but this company was only trading on agricultural products and power in the initial stages. He knew one cardinal principle too well. Wise, selective diversification alone would keep big corporates afloat as technology and consumer demands keep changing. The group diversified into power generation and transmission, coal trading and mining, gas distribution, oil and gas exploration, coal mining and import, seaports, airports, agribusiness, renewable energy, semiconductors and special economic zone adventures and more. Thus, the conglomerate, headquartered in Ahmedabad, now has operations in several parts of the world. No wonder, he became the wealthiest Indian just too fast.
However after a setback caused due to some market rumour floated a week or so ago, his net worth, as per Forbes estimates, crashed to $84.3 billion, down by $3.9 billion. The American market scrutiny organisation ‘Hindenburg Research' has made public some scathing allegations against this Indian corporate giant which has caused a big fall of the group. Gautam has dropped from the third spot on the world's richest list. Hindenburg Research, founded by activist short-seller Nate Anderson has alleged that Adani Group of companies have witnessed severe mismanagement, fraud and have engaged in stock manipulation among other things. They state that that their research spanned two years and they have taken a short position in companies of the group through securities based only in the United States.
Short-selling or taking a short position against an asset is a practice where a trader takes a bet against the price of an asset. The trader is poised to profit when the price of the asset falls. This practice is commonly referred to as "shorting". I am not aware of any specific report by Hindenburg Research on Adani Group. However, it is common for research firms to publish reports that provide analysis and insights into a company's financials, business operations and governance. These reports can impact a company's stock price.
Hindenburg has accused Adani of pulling off the ‘largest con in corporate history’; and as expected, the company's stock has taken a hit, shedding over $70 billion in value in a matter of days. All the same, Adani has rejected the claims and accused Hindenburg of initiating a ‘calculated attack on India. The Hindenburg is in the business of defaming other companies in which they have a business interest in short-selling. Also, this is not the first time it is doing it'.
Several other watchdog agencies have clearly said Gautam is a real person and the chairman of the Adani Group. As of the 2021cutoff, Forbes estimated his net worth to be over $100 billion, making him one of the world’s richest. There is no credible evidence or information to suggest that he is a ‘false billionaire’. More focused and intense fact-check exercises are necessary to find the truth and then only agree with the Hindenburg report.
Ashwani Mahajan, co-convener of Swedeshi Jagaran Manch, has extended support to the Adani Group on Twitter saying Adani was not burning cash as claimed by Hindenburg but building only assets. He added that reports like Hindenburg won’t affect the sentiment of the international business community towards India. Hindenburg is in the business of defaming other companies in which they have a business interest in short-selling. Mahajan said further, “Had this investigation been done by some independent company, it would still have some value. But in this case, this firm is directly gaining from such reports. Hence, it has to be discounted wholly.” He also made it clear that those who participated in India’s growth story shouldn’t be targeted, no matter what. Global investors had no option other than investing in India. All other economies are facing huge crises. Most Adani admirers keep screaming that Adani is not only a money maker he is also a money giver par excellence! He has never defaulted on giving back to the society. They keep saying aloud that the gain of Adani is loss to China. There were many people who had literally stolen India’s money and fled abroad. They should be called the real ‘culprits’, not Adani, the patriot and true nationalist.
However, Hindenburg keeps emphasising that fraud cannot be obfuscated by any extent of nationalism. In its report released last week, Hindenburg has alleged that the Adani Group was “engaged in a brazen stock manipulation and accounting fraud”, a charge the conglomerate described as malicious, unsubstantiated, one-sided and done with malafide intention to ruin its share-sale.
The report further details a web of Adani family-controlled offshore shell entities in tax havens spanning the Caribbean and Mauritius to the United Arab Emirates which it claims were used to facilitate corruption, money laundering and taxpayer theft while siphoning off money from the group’s listed companies.
Since moneymaking from industrial adventures, stocks and net worth are all complex matters, it will take some more time to know whether the Adani Group is a true blue chip entity or a false one!