NEW DELHI: Indian billionaire Gautam Adani saw more than $20bn (£16bn) wiped off his fortune on Friday, after investors fled his companies for a second day prompted by fraud claims made by a US investment firm.
The Adani Group has dismissed the report as malicious, but the response has failed to stem the uproar.
India’s main opposition party has demanded an investigation.
The firm’s publicly listed companies have lost about $50bn in market value.
Shares in the firm’s flagship Adani Enterprises dropped by nearly 20% on Friday, while some of the group’s other publicly listed firms tumbled even further, triggering automatic halts in trading in Mumbai.
Adani has dropped from the third richest person in the world to the seventh on Forbes’ rich list, maintaining an estimated net worth of more than $96bn, according to the publication. The fallout comes just days after Hindenburg Research, a firm that specializes in “short-selling”, or betting against a company’s share price in the expectation that it will fall, published a report accusing the Adani Group of engaging in decades of “brazen” stock manipulation and accounting fraud.
Its report came ahead of a planned share sale for Adani Enterprises, which is now seeing little demand.
Adani is a self-made tycoon who has built a fortune with investments in ports, airports, renewable energy and other industries. His wealth has soared in the past three years, as the value of shares in his firms skyrocketed.
His firm said it was considering legal action against Hindenburg.
An ally of Indian Prime Minister Narendra Modi, Adani has long faced claims from opposition politicians alleging that he has benefited from his political ties, which he denies. Many Indian banks and state-owned insurance companies have either invested in or loaned billions of dollars to companies linked to the Adani Group.
In interviews with Reuters, some of India’s leading public sector banks said they were not worried about risks stemming from their exposure to the firm but the wider stock market has been hit by the episode, helping to send India’s benchmark Nifty 50 stock index down more than 1% on Friday.
Adani, 60, is the world’s third richest man behind Elon Musk and Jeff Bezos. He runs a sprawling port-to-energy conglomerate with seven publicly traded companies, 23,000 employees and a market capitalization of more than $230bn (£190bn).
He has been in the news this week because he is close to acquiring NDTV, India’s most respected news network, in what is his first major media venture.
Long before the school dropout-turned-trader became a billionaire with an inveterate appetite for risk, Adani had a narrow escape. In January 1998, he and an associate were reportedly kidnapped for ransom from their car at gunpoint by a group of men in Ahmedabad.
Two suspects were set free in 2018 after the businessman and his associate “never turned up for deposition despite repeated summons from the court”. A businessman who has often described himself as low-profile, Adani does not talk about these incidents much, apart from simply telling a journalist once that “two or three very unfortunate incidents have happened in my life”.
After dropping out of school when he was 16, Adani moved to Mumbai to try his hand at business, trading diamonds in a bustling commercial district. This foray into early business did not last long: two years later he returned to Gujarat, his home state, to run a packaging factory managed by a brother.