Adani boss, India’s richest man, has US$ 48bn wiped off his US$ 208bn

India’s richest man just had US$ 48bn wiped off his US$ 208bn Adani Group that an American short seller this week alleged had been engaged in “a brazen stock manipulation and accounting fraud scheme over the course of decades.”

Gautam Adani saw five of his seven listed businesses ending Friday 16 to 20 percent lower. This includes Adani Green Energy Ltd which only last year was issued provisional approvals for two wind projects in Mannar and Pooneryn, representing a reported investment of more than US$ 500mn.

Adani Ports, which lost 15.24% of its share price, had separately started construction of an estimated US$ 700mn terminal at the Colombo Port. How the scandal impacts these projects now remained to be seen.

Even taken at face value, the financials of the Adani Group showed that its seven listed companies had 85 percent downside “purely on a fundamental basis owing to sky-high

valuations,” US short seller Hindenburg’s report said. Key listed companies have also “taken on substantial debt, including pledging shares of their inflated stock for loans, putting the entire group on precarious financial footing.”

The Adani Group had called the fraud allegations baseless and accused Hindenburg of trying to smear its reputation and derail a public stock offering by

one of its companies.

According to Charles Schwab, the US financial advisory firm, short sellers borrow a security whose price they think would fall from their brokerage and sold it on the open market. They then planned to buy the same stock back later, hopefully for a lower price than they sold it for and pocket the difference after repaying the initial loan.