Adani scraps $2.5B share sale after fraud claims hit stock

NEW DELHI (AP) — Embattled Indian billionaire Gautam Adani called off his flagship company's $2.5 billion share share late Wednesday after a tumultuous week saw his conglomerate shed tens of billions of dollars in market value after claims of fraud from a U.S.-based short-selling firm.

Citing a volatile market and an unprecedented situation, the Adani Group said in a statement it decided not to go ahead with its share sale — which was preliminarily sold out as of Tuesday — and will return the proceeds from the offering.

Adani-related shares plunged in recent days after Hindenburg Research, a financial research firm with a track record of sending the stock prices of its targets tumbling, accused the group of “brazen” stock market manipulation and accounting fraud, among other financial abuses.

By the time trading closed Wednesday, Adani Enterprises was down by a whopping 28% — a day after its share sale drew nearly 51 million bids, exceeding the 45.5 million that was offered to the public. Stock in six of Adani's other listed companies also sunk between 2% and 19%.

“The market has been unprecedented and our stock price has fluctuated over the course of the day. Given these extraordinary circumstances, the Company's board felt that going ahead with the issue would not be morally correct,” Adani said in his first remarks since the controversy.

He added that the group acted to protect its investors and insulate them from any financial losses.

The share sale and its success were seen as a crucial test of investor confidence in Adani. The stock losses on Wednesday cost Adani his title as the richest man in Asia and in India, as his fortune plummeted to $72 billion, according to Bloomberg. Prior to the Hindenburg report, his net worth at around $120 billion made him the...