The stocks of companies linked to the Adani Group, founded by Asia’s richest man Gautam Adani, continued to fall in the Mumbai markets on Friday. This follows a report published by U.S. short seller Hindenburg Research, which conducted a two-year investigation into the group’s business practices.
The shares of Adani Enterprises, the group’s flagship company, sank as much as 20% and other linked companies saw similar losses. The sell-off intensified for the seven Mumbai-listed companies, resulting in a combined $47 billion loss in market cap since Hindenburg Research’s report was published on Wednesday.
Including Adani’s recent investments in cement companies ACC and Ambuja Cements, the Adani Group has lost a total of $51 billion in market value since Wednesday.
In response to the 100-page report, which alleged “brazen stock manipulation and accounting fraud” from the Indian conglomerate, the Adani Group held a conference call with bondholders of Adani Ports & Special Economic Zone.
The group disputed the claims, branding Hindenburg’s report as “bogus” and stating that the allegations of accounting fraud were “devoid of facts.”
The Adani Group also released an 18-slide presentation on its website, addressing the “myths of short sellers.” The presentation stated that eight of its nine portfolio companies are audited by one of the “big six” auditors and that six of its companies are “subject to specific regulatory review” for revenue, cost, and capital spending.
The group also defended itself over accounting, leverage, and governance concerns, stating that many of Hindenburg’s claims were already disclosed by the company.
In addition, the Adani Group announced on Thursday that it is exploring taking legal action against U.S.-based Hindenburg Research. The group’s head of legal, Jatin Jalundhwala, called the report “maliciously, mischievous, and unresearched.” In response, Hindenburg tweeted that it welcomes the legal action and suggested that the company file a suit in the U.S. where the research firm operates.
Hindenburg’s report has also received attention from notable figures in the financial industry. Bill Ackman, the founder of Pershing Square Capital Management, tweeted that the Hindenburg report is “highly credible and extremely well researched.”
It is worth noting the short-seller report is not the first of its kind, there have been several reports and allegations on the Adani Group, and the company has always defended itself and denied the allegations.