NEW DELHI: Shares in the business empire of Asia’s richest man Gautam Adani nosedived, extending this week’s losses to $45 billion, days after a US investment firm claimed it had committed “brazen” corporate fraud.
Adani, 60, began his week the world’s third-richest person but has tumbled down the rankings to seventh on Forbes’ billionaire’s tracker after losing $24bn in Friday’s trade.
His flagship Adani Enterprises plunged 15 per cent in Mumbai after midday, a fall of 508.45 rupees, triggering an automatic trading halt alongside five of its seven main listed subsidiaries.
“Obviously this is panic-selling,” JM Financials equity research chief Ashish Chaturmohta told AFP, adding that traders were creating fresh short-sell positions to protect previously made bullish bets on Adani stocks.
Hindenburg Research this week alleged in a report that Adani Group had used undisclosed related-party transactions and earnings manipulation to “maintain the appearance of financial health and solvency” of its listed business units.
But the conglomerate said on Thursday it was the victim of a “maliciously mischievous” reputational attack by Hindenburg just as it was preparing for a major fundraising round.
Legal chief Jatin Jalundhwala said in a statement that Hindenburg’s short position in the firm, announced in the report’s release, was proof the company had a vested interest in driving down Adani stocks.
Adani was exploring its punitive action against the research advisory in US and Indian courts, he added.
Hindenburg responded that Adani had ducked the issues its research had raised and instead resorted to “bluster and threats”.
“If Adani is serious, it should also file suit in the US,” the firm said in a statement. “We have a long list of documents we would demand in a legal discovery process.”