Indian billionaire Gautam Adani has pledged to increase oversight of the private family firm that controls his business empire after it was attacked by short sellers, according to two people with direct knowledge of the discussions.
Among the changes, the 60-year-old Adani Group founder has told advisers he plans to appoint a financial controller to oversee various trusts and other private companies, said the people, who declined to be identified because the talks are confidential. .
“The governance structure of the family office is going to be more like a public company, post this episode,” one person said. “This is what Mr. Adani decided.”
Others said Adani had suggested creating a board and hiring “another Robbie”, a reference to group chief financial officer Jugeshinder “Robbie” Singh, to oversee the family side of the business.
The plan is designed to address investor concerns after New York-based Hindenburg Research reported last month that Adani had artificially inflated its market capitalization. Short sellers also criticized the “labyrinth” of Adani’s private company and the family trust that controls the conglomerate.
The claim, which Adani denies, wiped $120bn off the group’s market value and prompted a margin call for a $1.1bn loan. Shares in Adani Enterprises, the group’s largest listed company, have fallen 50 percent since the publication of the Hindenburg report on January 24.
The family’s trust and related entities have come under scrutiny after the Hindenburg report raised more than a dozen questions related to Adani’s relatives, while suggesting some of the funds that have shares in the Adani company are secretly controlled by the family.
Adani, which denied all allegations of wrongdoing in a more than 400-page rebuttal, said it had disclosed all related-party transactions. But last week, index provider MSCI said it was reviewing the size of the free float on Adani shares in the Indian index, and reduced some of its weighting.
Adani has not commented publicly on the structure of his family office. The Adani Group declined to comment on the change in governance.
The Adani family trust and related parties, including several Mauritius-based funds, are the controlling shareholders of the listed companies of the vast infrastructure empire, known in India as the “promoter group”.
The Promoter group’s holdings included 72.6 percent of Adani Enterprises at the end of last year; 65 percent Adani Port and Special Economic Zone (Apsez), logistics unit; and 74.97 percent of electricity company Adani Power. In India, promoters are not allowed to own more than 75 percent of a listed company.
Shares in Adani Group companies slid again on Monday after Bloomberg News reported that the group will cut revenue growth targets. An Adani spokesperson issued a denial.
Adani Enterprises fell 7.6 percent in Monday’s trade, while Apsez fell 5.4 percent, according to National Stock Exchange data. Renewables unit Adani Green Energy lost 5 percent per day, as did thermal power producer Adani Power.
Additional reporting by Anjli Raval in London