Following the release of a lengthy negative study by American short-seller Hindenburg Research, shares of India’s Adani Enterprises have fallen precipitously over the past week. Some significant international players are well-known.
After the Hindenburg investigation accused the conglomerate of a “brazen stock manipulation and accounting fraud scheme over the course of decades,” the Adani Group of Companies had a significant sell-off that increased the overall group losses past $110 billion by Friday’s close.
Gautam Adani, one of the richest men in the world, and his ports-to-energy business have strenuously denied any wrongdoing.
The largest loss was experienced by Adani Enterprises, which lost more than $30 billion, or more than 60% of its market cap, between the report’s publication on January 24 and the end of trading on Thursday.
A 413-page riposte from The Adani Group, which vehemently refutes the claims and characterizes them as “nothing but a fabrication” from the “Madoffs of Manhattan,” failed to assuage uneasy investor mood or slow down a sharp sell-off.
Adani owns 64% of Adani Enterprises, with the Adani SB Family holding 55.27% and Gautam and brother Rajesh Adani serving as controlling directors of Adani Tradeline Pvt Ltd, which holds the remaining 8.73%.
State-owned Life Insurance Corporation of India is the third-largest stakeholder with a stake of 4.02%. The opposition called for a probe into the claims against Adani, a close ally of Indian Prime Minister Narendra Modi, and the morning sessions of both houses of parliament were suspended on Friday.
According to reports, on Friday, Pralhad Joshi, the Indian minister for parliamentary affairs, informed the media that the government “had nothing to do with Adani’s concerns.”
Two of the greatest names on Wall Street are represented on the list of the top 20 shareholders of Adani Enterprises: Vanguard owns 0.75% of the company, BlackRock Fund Advisors 0.57%, and BlackRock Advisors (U.K.) Ltd. 0.17%, respectively.
Vanguard and BlackRock spokespeople did not immediately reply to CNBC’s requests for comment.
According to ownership data, Elara Capital, which now owns 1.7% of Adani Enterprises, held the title of largest institutional shareholder up until February 2022.
Hindenburg has accused Elara’s Mauritius-based funds of being involved in a scheme to manipulate the share prices of Adani Group-controlled firms and conceal how much the family-owned. According to FactSet data, Elara has subsequently sold 72% of its shares in the company.
According to Companies House, Jo Johnson, the brother of former British Prime Minister Boris Johnson, resigned as a director of Elara on Wednesday.