India ’s infrastructure king Gautam Adani has known tense moments in his dramatic rise to become Asia’s richest man. But nothing compares to the current challenge he faces, with a US hedge fund accusing his namesake ports-to-energy empire of pulling “the largest con in corporate history” through accounting fraud, share-price manipulation and money-laundering. In a 413-page rebuttal, the Adani Group rejected Hindenburg’s charges as “baseless” and – wrapping itself in the Indian flag – called them a “calculated attack” on India’s growth story. “Fraud cannot be obfuscated by nationalism,” Hindenburg replied Monday. In three days of trading, the accusations have wiped nearly US$72 billion from the group companies’ market value, according to Bloomberg, badly eroding Adani’s own fortune in the process. A US$2.5-billion share sale by the conglomerate due to close on Tuesday was just two per cent subscribed. Adani, who last year was briefly the world’s second-richest person with a fortune of US$146.9 billion, has slipped to seventh with US$96.6 billion, Forbes says. Adani is the biggest target yet for six-year-old Hindenburg, a US-based short-seller, which has a feared Wall Street reputation for pursuing firms over alleged wrongdoing. India’s Adani hits back at Hindenburg report, says it made all disclosures While the Adani Group has been under scrutiny before over opaque transactions, hefty debt and sky-high market valuations, Hindenburg’s blistering allegations could potentially prove the most damaging. They also could have political reverberations given Adani’s long association with Prime Minister Narendra Modi . The two became close during the Hindu nationalist leader’s time as chief minister of Gujarat, which is Adani’s home state. A ‘survivor’ The self-made billionaire has had a more dramatic life than most, having survived a 1998 kidnap ransom attempt and the 2008 Pakistani terrorist attack on Mumbai’s Taj Mahal Palace hotel that left more than 160 people dead. The stocky, mustachioed Adani escaped the bloodshed by hiding in the hotel basement . Those experiences, friends say, have given him a “survivor’s instinct”. Adani, 60, was born in Gujarat’s commercial capital of Ahmedabad into a family of eight. His parents were Jains, a religion known for its non-violent beliefs and simple lifestyle. Jains don’t drink, smoke or eat meat and are perceived to have business acumen, work hard and be extremely upright in their dealings. Adani’s father was a middle-class textile merchant. Adani, who calls being an entrepreneur “my dream job”, dropped out of school at 16 to sell diamonds in Mumbai and moved on to running his brother’s plastics factory at just 20. From there, he built his own business, branching into commodities trading. In the late 1990s, he won the right to operate India’s key Mundra port. Then, he made his big move into fossil fuels, building a coal “pit-to-plug” power-supply behemoth. His group’s flagship, Adani Enterprises, became an incubator for his businesses that were spun off when they could stand alone. The conglomerate’s footprint now stretches across India’s economy. It owns the country’s biggest private port and is the largest private thermal-power producer and one of the leading private airport operators. Green pivot For the man known as India’s “coal king”, Adani now aims to become the world’s largest renewable energy producer and has a portfolio of projects in cement, defence, data centres, semiconductors and media. Until recently, though, Adani was overshadowed by the other big “A” of India’s corporate world: Mukesh Ambani , who controls Reliance Industries, another multinational conglomerate. But in February 2022, Adani overtook Ambani as Asia’s wealthiest person . Forbes pegs Ambani’s wealth at US$86.5 billion, putting him ninth in the global wealth stakes. Adani says financial growth is assured when a company’s strategy aligns with national interests and certainly, over the last decade, syncing his corporate goals with the government’s has served him well. His guiding principle is “nation-building” and self-reliance, the same patriotic themes Modi stresses. Certainly, no other businessman has ever been as tight with Modi. After his sweeping 2014 election win, Modi arrived in New Delhi aboard an Adani private jet. But Adani insists Modi has done him no favours, and expects none. Adani biographer R.N. Bhaskar wrote it’s been Adani’s “ability to build” relationships across the political spectrum that has spurred the group’s growth. Detractors, though, say Adani has benefited from “crony capitalism” thanks to his New Delhi connections. That talk has increased since the Adani Group won the bid to operate six airports in a 2020 government privatisation drive despite no prior industry experience. Aggressive expansion The other factor propelling the group’s growth is Adani’s fearless appetite for debt-fuelled expansion. Adani borrows money based on his own businesses to establish new ones. “Either you sit on the pile of cash or you continue to grow,” he said. It’s that aggressive, debt-driven growth which has triggered the most concern. In 2015, Credit Suisse described the group as a “House of Debt”. Last August, CreditSights, a fixed-income research firm owned by Fitch Group, called the group “deeply overleveraged”. But the report by Hindenburg is the hardest-hitting yet. It asserts the group’s use of “extreme leverage” leaves it on a “precarious financial footing”. The conglomerate has repeatedly said its debt levels are “healthy” and that it has “consistently” deleveraged. Adani and his family hold up to 75 per cent of group companies. The family also dominates the firm’s top leadership, creating what Hindenburg calls a “ripe environment for unilateral and opaque financing decisions”. The Hindenburg report accuses the group of using an extensive offshore shell company network for earnings manipulation and to pump up share prices, allegations also dismissed by Adani. Hindenburg, which has disclosed it has taken a “short position” in Adani companies, meaning it would gain from a drop in their value, has invited the group to sue the firm over the report. ‘Extraordinary’ growth Adani’s personal wealth has been turbocharged by the astonishing share-price growth of the group’s seven key listed companies that have climbed an average of 819 per cent in three years. He added more than US$100 billion to his fortune in that same period. “His wealth accumulation record is extraordinary,” James Crabtree, head of the International Institute for Strategic Studies in Asia, told CNN. Hindenburg’s report stated infrastructure firms are generally “low growth”, yet Adani’s companies’ valuations compare to “high-growth tech companies”. Adani’s defenders say India needs a hard-nosed, canny businessman like Adani who can cut through the country’s notorious red-tape and access global capital to build infrastructure and boost economic growth. Adani’s alignment of his corporate aims with Modi’s development goals may help the group weather the storm if investors opt to focus on longer-term prospects, analysts say. Adani’s “infrastructure plays as well as new energy foray” serve as “proxy for India’s growth”, says Geetanjali Kedia, an analyst at brokerage SP Tulsian. All is good as long as Modi remains in power and Adani’s companies generate enough cash to cover the debt, so the argument goes. Adani says business is about “managing uncertainties and turbulence”, qualities he may be tested on in coming days and weeks.