India’s Adani Group has denounced allegations of fraud made by Hindenburg Research as “baseless” and a “malicious combination of selective misinformation,” and is considering legal action against the US-based short seller. Hindenburg Research published an investigation on billionaire Gautam Adani’s sprawling conglomerate on Tuesday, accusing it of “brazen stock manipulation and accounting fraud scheme over the course of decades.” Hindenburg said it has taken a short position in companies in the Adani Group “through U.S.-traded bonds and non-Indian-traded derivative instruments.” Short sellers aim to make money by betting that the stock price of the companies they target will fall. Adani’s business empire contains seven listed companies — in sectors ranging from ports to power stations — and shares in most of them fell by between 3% and more than 8% on Wednesday. The plunge had an immediate impact on the billionaire’s net worth. According to Bloomberg’s Billionaires Index, Adani lost nearly $6 billion on Wednesday. He is currently worth $113 billion. Indian markets are closed Thursday. In its investigation, which Hindenburg said took two years to compile, the research firm questioned the “sky-high valuations” of Adani firms and said their “substantial debt” puts the entire group “on a precarious financial footing.” The research firm concluded its report with 88 questions for the Adani Group. These range from asking for details on Adani’s offshore entities, to why it has “such a convoluted, interlinked corporate structure.” CNN has not verified the claims in the report, and India’s stock market regulator did not immediately respond to a request for comment. Shares of Adani’s companies have surged in the last few years, making him Asia’s richest man. In a statement released a few hours after Hindenburg published its report, the Adani Group’s chief financial officer Jugeshinder Singh said that Hindenburg did not make “any attempt to contact us or verify the factual matrix,” adding that the allegations made by the short seller are “stale, baseless and discredited.” The conglomerate has faced scrutiny from Indian authorities in the past. In 2021, shares in Adani’s companies tumbled after The Economic Times newspaper said that foreign funds that hold stakes worth billions of dollars were frozen by the country’s National Securities Depository. The Adani Group called that report “blatantly erroneous.” Nate Anderson, who founded Hindenburg Research, has made a name for himself in the past few years by targeting companies that he thinks are overvalued and have suspect financials. Anderson is best known for going after electric truck company Nikola in 2020, calling it an “intricate fraud,” and causing the firm’s stock to plunge sharply. In 2022, Nikola’s founder was convicted by a US jury of fraud in a case alleging he lied to investors about the company’s technology. But some have accused Hindenburg of trying to push stocks lower with its research reports in order to make a profit. Its report on the Adani Group comes at a sensitive time. Later this week, Adani Enterprises, the conglomerate’s flagship company, is aiming to raise 200 billion rupees ($2.5 billion) by issuing new shares. Singh said that the “timing of the report’s publication clearly betrays a brazen, mala fide intention to undermine the Adani Group’s reputation with the principal objective of damaging the upcoming follow-on public offering.” The conglomerate is also considering taking five new businesses to the stock market in the next two to five years. Legal action? In another statement on Thursday, the Adani Group said it is “evaluating the relevant provisions under US and Indian laws for remedial and punitive action against Hindenburg Research.” It added that it is “deeply disturbed” by the impact Hindenburg’s report has had on the group, its shareholders and investors, and by the “unwanted anguish caused to Indian citizens.” A college dropout and a self-made industrialist, Adani is the world’s fourth richest man, ahead of Bill Gates and Warren Buffet, according to Bloomberg’s Billionaires Index. He is also seen as a close ally of India’s current prime minister, Narendra Modi. The 60-year-old tycoon founded the Adani group over 30 years ago. It now has established businesses in industries ranging from logistics to mining, and is aggressively growing in diverse sectors such as media, data centers, airports, and cement. But this is not the first time analysts have expressed fear that the rapid expansion of his business comes with a huge risk. Adani’s juggernaut has been fueled by a $30 billion borrowing binge, making his business one of the most indebted in the country. Last year, CreditSights, a research firm owned by Fitch Group, published a report about Adani Group titled “Deeply Overleveraged” in which it expressed strong concerns about its debt-funded growth plans. Adani Group responded to CreditSights with a 15-page report, saying that the “leverage ratios” of its companies “continue to be healthy and are in line with the industry benchmarks in the respective sectors” and that they “have consistently de-levered” in the last nine years.