Billionaires: Gautam Adani's conglomerate scraps $600m bond sale after US bribery charges

In our round-up of the world’s ultra-wealthy, Citadel’s Ken Griffin says multi-strategy hedge fund boom is over and Xiaomi co-founder increases electric vehicle goals

Gautam Adani was charged with participating in a scheme that involved $250 million in bribes to Indian government officials. Bloomberg

Adani Group units scrapped a $600 million dollar bond sale after US prosecutors charged founder Gautam Adani with participating in an alleged bribe plot.

The Indian conglomerate decided not to proceed with the offering after announcements by the Department of Justice and the Securities and Exchange Commission, according to a source.

Mr Adani, one of the richest men in the world, was charged with allegedly participating in a scheme that involved promising to pay more than $250 million in bribes to Indian government officials to secure solar energy contracts and concealed the plan as they sought to raise money from US investors.

Hours before, units of the conglomerate had priced the bond offering that was subsequently cancelled.

“The defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars,” said Breon Peace, US attorney for the Eastern District of New York, which brought the case.

US law allows federal prosecutors to pursue foreign corruption allegations if they involve certain links to American investors or markets.

Adani Green Energy UP dollar notes issued in March slid a record 15 cents to as low as 80 cents, according to data compiled by Bloomberg. Other securities from group companies dropped the most since a short-seller report in 2023 by Hindenburg Research to as low as 74 cents. That report last year had also sparked a more than $150 billion rout in Adani Group stocks at the time.

Mr Adani, 62, is widely perceived as a key ally of Indian Prime Minister Narendra Modi. The billionaire denies receiving political favours but says his conglomerate always aligns its business strategies to the policy priorities of the government, regardless of who is in power.

Adani Group has a wide-ranging presence across the South Asian country and beyond, in businesses including ports, coal mines, highways and airports. The group attracts capital from investors around the world.

The US charges are a setback for Mr Adani’s group, which had been seeking to rebuild investor confidence after Hindenburg Research accused it of stock manipulation and accounting fraud last year. The group strenuously denied those allegation and its bonds had earlier rebounded from that crisis.

After also initially dropping on the short-seller’s claims, Mr Adani’s fortune has also rebounded. He is the world’s 18th richest person, worth $85.5 billion, and the second-wealthiest in India, according to the Bloomberg Billionaires Index.

Prosecutors in Brooklyn alleged on Wednesday that Mr Adani and other defendants lied about the plan as they sought to raise money from US investors. The five-count indictment also accuses Mr Adani’s nephew Sagar Adani and Vneet Jaain, executives at an Indian renewable energy company, of breaking federal laws.

Prosecuting the case would take months, if not years, meaning that it will fall to the incoming Trump administration’s Justice Department to determine how to proceed. Mr Peace, the Brooklyn US attorney who was appointed during the Biden administration, is expected to step down and be replaced by Donald Trump's pick.

Ken Griffin, chief executive and founder of Citadel Advisers, is estimated to have a net worth of $42.1 billion. Bloomberg

Ken Griffin

The era of explosive growth in multi-strategy hedge funds is over, according to billionaire Ken Griffin, who runs one of the biggest such firms.

“That chapter has come and gone,” the Citadel founder said in an interview with Bloomberg News in Oxford, UK, on November 18. “The AUM (assets under management) flows into multi-strategy funds are basically a push today.”

These funds have gobbled up cash in recent years by delivering mostly steady gains even during periods of market volatility, driven by a broad variety of investing approaches in their trading teams. Their ability to charge higher fees, spend big to recruit the best traders and fuel their positions with borrowed money have made them the most influential force in the $4.5 trillion hedge fund industry.

Citadel’s capital has risen more than five times to $65 billion since 2008, while rival Millennium Management has expanded at the same clip to over $70 billion, and DE Shaw & Co has amassed more than $60 billion.

Many of the top players are no longer actively raising cash as a talent crunch and challenges moving in and out of leveraged bets curtail their ability to keep growing.

Assets managed by multi-strategy hedge funds dropped slightly to $366 billion this year, the first decline since 2016, from just $134 billion in 2017, according to Goldman Sachs Group.

For Mr Griffin, the growth trajectory was boosted by capital returns to investors, known as limited partners or LPs.

The AUM flows into multi-strategy funds are basically a push today

Ken Griffin,
founder, Citadel Advisers

“Let’s face it: that was driven by the fact that we in particular were returning billions of dollars of capital a year back to LPs. They were looking to put that money to work,” he said.

Citadel has regularly given back profits to control its size, returning $25 billion to clients since 2017.

In an industry known for its secrecy and reluctance to speak in public forums, Mr Griffin has been a notable outlier. He’s backed a lower-tax and free-market agenda.

Mr Griffin is estimated to have a net worth of $42.1 billion, according to the Bloomberg Billionaires Index.

He donated more than $100 million to pro-Republican political action committees in this presidential cycle, according to campaign finance tracker OpenSecrets, and last month predicted that Donald Trump would win the presidency.

When asked about a potential Trump trade for the next four years, Mr Griffin took a long pause before predicting that companies previously subjected to a regulatory onslaught were going to do better.

“The biggest shift is not a particular company per se, but it’s that the animal spirits in America are being reignited,” Mr Griffin said.

He predicted that businesses under the new administration will be willing to take more risk, build more factories, put more money back into research and development, and allocate more money to long-term investments from customer acquisition to new technology.

“That’s the biggest sea change,” Mr Griffin added. “That’s going to lift all boats.”

Lei Jun, chief executive of Xiaomi, is estimated to have a net worth of $24.6 billion. Bloomberg

Lei Jun

Chinese smartphone maker Xiaomi is now aiming to deliver 130,000 electric vehicles in 2024, up from a previous target of 120,000, raising its target by more than 8 per cent in a show of confidence in the fledgling business.

Billionaire co-founder Lei Jun unveiled the revised goal on social media just hours before the Chinese company was slated to report quarterly earnings.

That underscores the entrepreneur’s desire to take Xiaomi – best known for affordable gadgets and devices – deeper into a market crowded with deep-pocketed players such as Tesla and BYD.

Mr Jun has a net worth of $24.6 billion, according to the Bloomberg Billionaires Index.

Analysts expect Xiaomi to grow its revenue by about 27 per cent in the September quarter thanks to contributions from its nascent EV business.

But net income is projected to slip, reflecting the cut-throat competition with established Chinese EV players and a fierce rivalry between both domestic and global brands in the world’s largest smartphone arena.

Compiled from Bloomberg