“When the market stabilizes, we will review our capital markets strategy,” said billionaire and founder Gautam Adani in a video message to investors, according to Bloomberg.
The statement comes after Adani Entreprises hastily withdrew its new share issue of $2.5 billion, after the share price plummeted to the point where it was below the levels offered to investors in the issue, according to The New York Times.
The race comes as a result of a report from the American investment company Hindenburg Research, which last week accused Adani Enterprises of being behind “the biggest fraud in corporate history” through, among other things, price manipulation and shell companies in tax havens.
Betting on declines
Hindenburg is an investment company that invested in shorting shares, that is to say that the company makes money from the share value falling. According to The New York Times, Hindenburg has targeted companies suspected of fraud, and has previously targeted the electric car manufacturer Nikola, which led to the company’s stock falling and the resignation of CEO Trevor Milton, who was later convicted of fraud.
Gautam Adani has dismissed the report, calling it an attack on the whole of India.
But investors have turned a blind eye, and the stock has been falling day after day. Lenders such as Citigroup and Credit Suisse have stopped accepting Adani assets as collateral.
Thursday was no exception, as Adani Enterprises fell another ten percent. This led to the stock being suspended from trading on the Bombay Stock Exchange, which also affected five other companies in the group – Adani Green Energy, Adani Ports, Adani Total Gas and Adani Transmission.
“Strong Foundation”
The meltdown has also sent Gautam Adani out of the top ten list of the world’s richest people. Despite the race, he dismisses the problems.
— The foundation for our company is strong. Our balance sheet is healthy and our assets robust. Our ebitda levels (earnings before interest, taxes, depreciation and amortization) and cash flows have been very strong and we have an impeccable track record of meeting our debt obligations, he says according to Bloomberg.
Gautam Adani, 60, dropped out of school at 16 to move to Bombay and start working as a diamond merchant. He eventually became one of the world’s richest people, whose company has tens of thousands of employees. He has built his business empire from the ground up, owning ports, coal mines, food companies, media and airports, and also deals in iron ore, solar power and infrastructure.
Adani has been accused of benefiting from his close ties to Prime Minister Narendra Modi, something he himself has denied.