View of Adani corporate office building in Ahmedabad.
New Delhi CNN  — 

The Adani Group has accused a US investment firm of launching “a calculated attack” on India by publishing a report alleging widespread fraud at the ports-to-power conglomerate.

Hindenburg Research released its report on billionaire Gautam Adani’s business last week, accusing the group of “brazen stock manipulation and accounting fraud scheme over the course of decades.” It said it had taken a short position in Adani Group companies, meaning it would benefit from a drop in their value.

Since the release of Hindenburg’s report, Adani’s business empire has lost more than $70 billion of its stock market value. The infrastructure tycoon’s net worth has also plummeted by some $30 billion, according to the Bloomberg Billionaires Index.

He is still Asia’s richest man with a personal fortune worth over $92 billion, which is $10 billion more than fellow Indian entrepreneur Mukesh Ambani.

The Adani Group had already denounced the Hindenburg report as “baseless” and “malicious” in its initial response a few hours after the report’s release, and said Thursday that it was considering legal action. It followed that on Sunday with a long and angry rebuttal running to more than 400 pages, in which it called Hindenburg’s allegations “baseless and discredited” and said the research firm had an “ulterior motive.”

“This is rife with conflict of interest and intended only to create a false market in securities to enable Hindenburg, an admitted short seller, to book massive financial gain through wrongful means at the cost of countless investors,” it said.

Fast expansion

The 60-year-old tycoon founded the Adani Group over 30 years ago, and is seen as a close ally of India’s current prime minister, Narendra Modi.

Before the rout, which continued on the Mumbai stock exchange on Monday, markets had been cheering for the businessman and his breathless pace of expansion. Investors were betting on the self-made industrialist’s ability to grow his businesses in sectors that Modi had prioritized for development.

In its detailed response Sunday, the Adani Group portrayed the US short seller’s report as an “attack” on India, its economy and investors.

“This is not merely an unwarranted attack on any specific company but a calculated attack on India, the independence, integrity and quality of Indian institutions, and the growth story and ambition of India,” it said.

Hidenburg had concluded its report last week with 88 questions for the Adani Group. These ranged from asking for details on the group’s offshore entities, to why it has “such a convoluted, interlinked corporate structure.”

The Indian conglomerate called those questions “rhetorical innuendos coloring rumors as fact.” It then sought to answer them, and published some tables and charts to support its position.

The long rebuttal sought to reassure investors about the group’s debt, banking relationships and corporate governance practices. Shares in Adani Enterprises, the group’s flagship company, were up over 4% on Monday, but most Adani stocks extended last week’s losses.

Hiding behind ‘nationalism’?

The conglomerate’s chief financial officer Jugeshinder Singh compared the Indian market reaction to one of the most horrific events from the country’s colonial past under British rule.

“In Jallianwala Bagh, only one Englishman gave an order, and Indians fired on other Indians. So am I surprised by the behavior of some fellow Indians? No,” Singh told Mint business daily in an interview published Monday.

On April 13, 1919, British Brigadier General Reginald Dyer ordered his soldiers to fire without warning on a peaceful protest of thousands of unarmed people in Jallianwala Bagh, a public garden in the city of Amritsar. They stopped firing 10 minutes later when their ammunition ran out. The horrific event is now known as the Jallianwala Bagh or Amritsar Massacre.

Hindenburg’s claims come at a sensitive time for Adani. He is aiming to raise 200 billion rupees ($2.5 billion) by issuing new shares in Adani Enterprises this month. The offer will close on Tuesday.

Hindenburg responded to Adani’s rebuttal by saying “fraud cannot be obfuscated by nationalism.”

“Adani Group has attempted to conflate its meteoric rise and the wealth of its Chairman, Gautam Adani, with the success of India itself,” it said in a post on Twitter on Sunday.

Hindenburg went on to add that the group has ignored “every key allegation we raised.”

“In terms of substance, Adani’s 413 page response only included about 30 pages focused on issues related to our report,” it said.

“The remainder of the response consisted of 330 pages of court records, along with 53 pages of high-level financials, general information, and details on irrelevant corporate initiatives, such as how it encourages female entrepreneurship and the production of safe vegetables.”