India’s wealthy class has come to the defense of the country’s markets after Adani Group chairman Gautam Adani lost $61.6 billion in net worth.
"Global media is speculating whether current challenges in the business sector will trip India’s ambitions to be a global economic force," billionaire Anand Mahindra wrote on Twitter.
"I’ve lived long enough to see us face earthquakes, droughts, recessions, wars, terror attacks," he added. All I will say is: Never, ever bet against India."
The Adani Group has found itself at the center of allegations that it committed fraud and stock-price manipulations, levied by Hindenburg Research, a relatively young "forensic financial group" based in New York City that published its allegations in a report on Jan. 24, claiming that "the World’s third-richest man is pulling the largest con in corporate history."
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Hindenburg alleged that Adani's older brother, Vinod Adani, maintained at least 38 shell entities that he used to manipulate stocks and launder money for the Adani Group, with many of them ranking among the largest public holders of Adani company stock. The forensic report also noted that the Adani group has been subject to four major government fraud investigations for similar charges.
Adani himself came to international attention last year in February when he reportedly commanded a net worth of $152.2 billion, making him the second-richest man in the world at that time – overtaking Elon Musk but falling short of Bernard Arnault, who has a net worth of $154.7 billion, according to Forbes.
The Hindenburg allegations initially took only a small chunk of value, but anger in India has grown over the following weeks, leading to bigger losses. The group as a whole lost around $115 billion in value from its listed entities, representing around half of its total value, according to The Guardian.
Investors, spooked by the report, pulled out of the companies, which sent them into free fall and also undermined the overall Indian stock market.
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In an official response to the allegations, the Adani Group said the report was a "calculated attack on India, the independence, integrity and quality of Indian institutions and the growth story and ambition of India," The Diplomat reported.
The move to link the Adani fortunes to India’s as a whole helped to engender greater support, with other billionaires and members of the wealthy class of the country coming to the group’s defense.
Uday Kotak, CEO of Kotak Mahindra Bank, wrote on Twitter that he didn’t see the Adani’s troubles as a "systemic risk to Indian financial system," but he argued that it highlighted the "challenges and vulnerabilities" of the market’s reliance on "global sources for debt and equity financing."
"Time to further strengthen Indian underwriting and capacity building," Kotak concluded.
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Virender Sehwag, a popular cricket player, wrote on Twitter that "the hitjob on India’s market looks like a well-planned conspiracy."
But a member of the Hindenburg group cultivated a number of responses from prominent Indian media personalities' social media, all with similar messages and spelling errors that hit out at the group for "attacking" India by attacking Adani.
Adani allegedly has a very cozy relationship with Indian President Narendra Modi, so much so that Modi flew aboard Adani’s private jet to the nation’s capital to take office.
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Modi said on Wednesday that Indians will not swallow "lies and abuse" against him, as opposition critics accuse his government of giving undue favors to Adani’s business, Reuters reported.
Opposition lawmakers have demanded an investigation into the Adani Group.
