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

NEW DELHI (AP) — Embattled Indian billionaire Gautam Adani said Thursday his conglomerate will review its plans for raising capital after calling off his flagship company’s $2.5 billion share offering following the loss of tens of billions of dollars in market value due to claims of fraud by a U.S.-based short-selling firm.

Adani Enterprises canceled the share sale late Wednesday, citing “market volatility.” Stocks in the coal mines to ports conglomerate sank after Hindenburg Research, which has a track record of sending stock prices of its targets tumbling, accused the group of “brazen” stock market manipulation and accounting fraud, among other financial abuses.

The share sale was seen as a crucial test of investor confidence in Adani, whose net worth had shot up about 2,000% in recent years as share prices for his listed companies soared.

By the time trading closed Wednesday, Adani Enterprises was down by a whopping 28% in just one day. But the share offering had drawn nearly 51 million bids, exceeding the 45.5 million offered to the public. Stock in six of Adani’s other listed companies sank between 2% and 19%.

Early Thursday, Adani Enterprises was down by 5%. Stocks in four of Adani’s other listed companies were down by 10% and two others sunk between 5% and 8%.

In a video address Thursday, Adani said the decision to scrap the share offering was made “to insulate the investors from potential losses.”

“For me, the interest of my investors is paramount and everything else is secondary,” he said.

Adani Enterprises said in a statement that it would withdraw the transaction and return the money to its investors. The decision would not “have any impact on our existing operations and future plans,” it said, adding that the group’s balance sheet was “very healthy” with...