The Fort Worth Press - India's Adani shares plunge again after stock sale cancelled

Adani's empire has lost more than $100 billion following explosive allegations of accounting fraud last week by US short-seller Hindenburg Research that the firm has rejected.

The sale of shares in Adani Enterprises had been intended to raise around $2.5 billion to help reduce debt levels -- which have long been a concern -- and broaden its shareholder base.

But small investors stayed away as the market price dropped below the offer range, and it was only fully subscribed after support from Abu Dhabi-based International Holding Company as well as, according to Bloomberg citing unidentified sources, fellow Indian tycoons Sajjan Jindal and Sunil Mittal.

Even so, Adani Enterprises' share price plunged another 28.45 percent in Mumbai on Wednesday.

The trigger was news that Swiss banking giant Credit Suisse had stopped accepting Adani bonds as collateral for loans it advances to private banking clients, Bloomberg reported.

Adani Enterprises lost another 10 percent, forcing trading to be suspended in its shares and several other Adani companies.

The Adani Enterprises board said in a late-night statement it had decided not to proceed with the share sale "in the interest of its subscribers" and all payments would be refunded.

The firm said that going ahead with the issue "would not be morally correct".

Adani himself issued a video statement on Thursday in which he insisted that the "fundamentals of our company are very strong, our balance sheet is healthy and assets robust".

The slide in Adani's personal wealth has seen him fall out of the top 10 real-time Forbes rich list and overtaken as Asia's richest man by fellow Indian Mukesh Ambani.

- 'Serious investigation' -

Publicity-shy Adani, 60, has seen his empire expand at breakneck speed, with shares in Adani Enterprises soaring more than a thousand percent over the past five years.

This helped him last week become the world's third-richest man behind Elon Musk and France's Bernard Arnault and family.

According to Hindenburg Research, Adani has artificially boosted the share prices of its units by funnelling money into the stocks through offshore tax havens.

This "brazen stock manipulation and accounting fraud scheme" is "the largest con in corporate history", Hindenburg said in its report.

Adani said it was the victim of a "maliciously mischievous" reputational attack and issued a 413-page statement on Sunday that said Hindenburg's claims were "nothing but a lie".

Hindenburg, which makes money by betting on stocks falling, said in response that Adani's statement failed to answer most of the questions raised in its report.

Critics say Adani's close relationship with Prime Minister Narendra Modi has helped him win business and avoid proper regulatory oversight.

Modi, who like Adani is from Gujarat state, has not commented publicly since the Hindenburg claims, which analysts say has hurt India's image just as it seeks to woo overseas investors away from China.

The firm's many interests include ports -- the firm took control of one of Israel's biggest this week -- telecoms, airports, media and coal, oil and solar power.

India's opposition Congress party called this week for a "serious investigation" by the central bank and regulator into Adani's firms following the Hindenburg allegations.

"For all its posturing about black money, has the Modi government chosen to turn a blind eye towards illicit activities by its favourite business group?" Congress said.

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P.Grant--TFWP