India's Adani Group shares plunge, hit by short-seller

NEW DELHI (AP) — India’s Adani Group vehemently objected Wednesday to allegations by short-selling firm Hindenburg Research that caused shares in its companies to plunge by as much as 8.1%.

Hindenburg issued a report late Tuesday saying it was betting against shares in companies within the Adani empire, founded by Asia’s richest man, coal magnate Gautam Adani. Businesses in the conglomerate span industries including construction, data transmission, media, renewable energy, defense manufacturing and agriculture.

Adani made a vast fortune mining coal as energy hungry India grew swiftly after its economy was liberalized in the 1990s. The market value of his companies has soared in recent years, one of the reasons Hindenburg said it judged the seven key Adani listed companies to have an “85% downside, purely on a fundamental basis owing to sky-high valuations."

Shares in Adani Transmission plunged 8.1% on Wednesday. Adani Ports and Special Economic Zone Ltd. sank 6.1% and other group companies fell between 1.1% to 5%. The lost market capitalization amounted to more than $9 billion, according to the Financial Times.

The Adani Group’s chief financial officer issued a statement expressing shock over Hindenburg’s report, which he called a “malicious combination of misinformation and stale, baseless and discredited allegations that have been tested and rejected by India's highest courts."

“The group has always been in compliance with all laws, regardless of jurisdiction, and maintains the highest standards of corporate governance," said the statement by group CFO Jugeshinder Singh.

Hindenburg Research said its report followed a two-year investigation. It alleged the Adani Group had engaged in stock price manipulation and accounting fraud, among other abuses. It said its...