After a tumultuous 18 months, Indian billionaire Gautam Adani is reportedly planning to overhaul his family office in a bid to draw a line under the Hindenburg scandal that engulfed his empire.
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Adani, whose estimated $85.7 billion fortune makes him Asia’s second richest person, plans to introduce a level of disclosure usually associated with listed companies, according to Bloomberg.
The tycoon has witnessed rapid growth across his empire over the last five years. However the upwards charge, and the the surge in his firms’ shares, were hit after short-seller Hindenburg Research made allegations of corporate malfeasance in January 2023. The Adani Group has denied the claims.
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The decision to appoint auditors from a top global firm and hire a CEO for his family office appears to be a bid by Adani to enhance transparency and credibility to his businesses. The founders of the mining-to-media conglomerate are said to be in talks with two major accounting firms to audit the family offices’ accounts.
Moving on from short-selling allegations
In early 2023, Manhattan-based Hindenburg Research published a 30,000-word report which it claimed showed evidence of ‘brazen stock manipulation’ and ‘accounting fraud’ within the Adani Group.
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Despite the Adani Group denying these accusations, the short seller’s report led to a significant drop in Adani companies’ market value and prompted the founders to initiate damage control measures for months. Within days, valuations across the group had dropped by $100 billion: taking the Adani Group down to 60 per cent of its previous size.
In a bid to stop the damage, Adani pledged a shake-up of corporate governance, as well as hiring one of New York’s most aggressive law firms to challenge the allegation by Hindenburg.
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A newly professional family office will most likely go some way to enhance the conglomerate’s credibility as it expands globally and attracts investors.
Bringing about change
The team will work across the listed Adani Group firms and prepare financial reports for additional disclosures, sources close to the Indian tycoon said. The process of hiring a team of about five people, led by a CEO and a chief investment officer, is reportedly underway.
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They will initially report to the Group Chief Financial Officer, Jugeshinder Singh, and eventually to the billionaire-founder himself.
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While it is not uncommon for billionaires actively running their businesses to hire professionals to lead their wealth offices, the decision to appoint a global audit firm and increase disclosures is unusual.
The recast family office is expected to be fully operational by April 2025, with potential structural changes along the way.
