Gautam Adani loses $13bn in worst wealth rout after sell-off in group stocks
Indian billionaire Gautam Adani’s dream run up the global wealth rankings faltered after a media report that raised questions about some offshore investors triggered a rout in his conglomerate’s six listed stocks.
The tycoon lost more money than anyone else in the world
over the past week, with his fortune declining by about $13.2 billion to
$63.5bn by Thursday, according to the Bloomberg Billionaires Index.
A few days earlier, Mr Adani, 58, had been closing the gap
on Mukesh Ambani as Asia’s richest man. Four out of six Adani group stocks fell
further on Friday, taking last week's sell-off to a fifth consecutive session.
The about-turn began on Monday after the Economic Times
reported that India’s national share depository had frozen the accounts of
three Mauritius-based funds – Albula Investment Fund, Cresta Fund and APMS
Investment Fund – because of insufficient information on the owners.
The bulk of the holdings in the funds – about $6bn in total
– are shares in Mr Adani’s companies.
Although the Adani Group labelled the report “blatantly
erroneous” and “done to deliberately mislead the investing community”,
concerned investors rushed for the exit.
The Mauritius offshore funds hold more than 90 per cent of
their managed assets in Adani Group companies, according to Bloomberg
Intelligence. Adani Group said on Monday that the funds “have been investors in
Adani Enterprises for more than a decade ... We urge all our stakeholders not
to be perturbed by market speculations.”
In identical exchange filings on the same day, Adani Group
companies said that they had written confirmation from the registrar and
transfer agent that the offshore funds’ dematerialised accounts in which Adani
shares were held were not frozen.
Albula and APMS said in separate statements dated June 14,
which were sent by their management company IQ EQ Fund Services (Mauritius),
that the funds were fully operational.
The relevant National Securities Depository Limited entry
"for APMS Investment Fund shows a technical ‘account level freeze’ only
that has absolutely no relevance to its normal FPI trading activities”, APMS
said.
The shares of Adani Green Energy, the mogul’s most valuable
asset, slipped by about 13 per cent last week in Mumbai. Adani Ports &
Special Economic Zone was down 17 per cent while Adani Power, Adani Total Gas
and Adani Transmission plunged by at least 22 per cent this week. Flagship
Adani Enterprises fell by about 7 per cent.
However, Adani Ports and Adani Enterprises closed higher on
Friday, paring some of the week’s losses.
Tesla chief executive Elon Musk has decided to sell the last
of his houses a week after a report revealed that he and other billionaires
paid little or no income taxes for several years.
Mr Musk, 49, said that he only has one house in the San
Francisco Bay area that is being rented out for events and that if he sold, it
“would see less use, unless bought by a big family, which might happen some
day”.
He first announced plans to sell his homes and most of his
possessions more than a year ago as a way to soften criticism of his wealth.
Within days, he put two of his California properties on the market.
Earlier this month, ProPublica reported that Mr Musk, Amazon
chief executive Jeff Bezos and Berkshire Hathaway chairman Warren Buffett have
paid little income tax relative to their outsize wealth. The report quoted a
trove of Internal Revenue Service data on tax returns for thousands of wealthy
Americans. Mr Musk paid no federal income taxes in 2018 and less than $70,000
in 2015 and 2017, according to the report.
An IRS official said last week that the data leak had been
referred to the FBI.
After the ProPublica report, Mr Musk tweeted that he would
keep paying income taxes in California in proportion to his time in the state,
which he said would be significant. He moved to Texas last year and said he now
rents a house worth about $50,000 in Boca Chica from SpaceX, which has a launch
site in the area.
Patrick Drahi bought a 12 per cent stake in the BT Group and
pledged to support its high-speed broadband exercise, an unexpected move that
marks a return to form by the deal-hungry French-Israeli cable billionaire.
Mr Drahi’s newly created company Altice UK acquired 1.2
billion shares in Britain’s dominant phone company, it said 10 days ago. The
stake is worth about £2.2bn ($3.05bn) and makes him the company’s biggest
shareholder.
The entrepreneur has a history of challenging the old
incumbents in Europe’s telecoms industry and has often driven far-reaching
change and forced asset sales at the companies he has invested in. More
recently, he took a break from major deals to focus on paying down debt.
The new stake in BT is a significant surprise and a
"proper curve ball", said Carl Murdock-Smith, an analyst at
Berenberg.
Mr Drahi, 57, said he will use Altice’s expertise in fibre
network installation to help BT expand its own.
The British company has been looking for a partner to help
it instal an extra 5 million fibre optic connections by 2026, opening up its
infrastructure to an external investor for the first time.
Altice said it has no plans to launch a full takeover bid
for BT.
BT said that it welcomes “all investors who recognise the
long-term value of our business and the important role it plays in the UK. We
are making good progress in delivering our strategy and plan”.
Mr Drahi established himself by buying and selling small
cable companies in France, before embarking on a debt-fuelled acquisition spree
that turned his modest cable TV and phone group into one of the world’s biggest
media and telecoms businesses.
The company is still saddled with €35bn ($41.6bn) in debt,
according to data compiled by Bloomberg.
Cheng Wei, the billionaire co-founder of Chinese
ride-hailing company Didi Chuxing, is poised to shoot up the ranks of the
super-rich when his company lists in the US.
Didi last week filed for an initial public offering under
its formal name of Xiaoju Kuaizhi and revealed that the Chinese entrepreneur
owns 7 per cent of the company. With Didi reportedly trading at a value of
about $95bn on the secondary market in recent months, that stake could be worth
as much as $6.7bn, according to the Bloomberg Billionaires Index.
Co-founder and president Jean Liu owns a 1.7 per cent stake
that could be worth $1.6bn. Eight other executives collectively hold about 1.8
per cent of the company, worth about $1.7bn in total.
It is the latest example of ride-hailing riches being minted
in Asia as companies backed by Masayoshi Son’s SoftBank Group prepare to go
public. Singapore-based Grab Holdings is poised to merge with a special purpose
acquisition company while Indonesia’s GoTo Group is pursuing a listing by the
end of the year.
“Ride mobility is one of the most significant growth
industries in Asia,” said Gary Dugan, chief executive of the Global CIO Office
in Singapore. The scale of the Didi offering “shows just how much economic
value continues to be created”.
A Didi representative did not respond to a request for
comment.
The ride-hailing company is counting on a remarkable
post-pandemic recovery that hastened after China became the world’s first major
economy to emerge from Covid-19. People returning to work and the resumption of
travel helped revenue to more than double to 42.2bn yuan ($6.6bn) in the first
quarter, reversing last year's decline.
Didi is one of the largest Chinese internet companies to tap
into public markets in recent years, part of a second wave of start-ups
aspiring to join Alibaba Group and Tencent in the upper echelons of the China's
technology industry.
With more than 493 million annual active users mostly in
China, the company was valued at $62bn after an earlier funding-raising
exercise and has sought a valuation that is between $70bn and $100bn in the
IPO.
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