Gautam Adani overcame college dropout to become Asia’s richest man, but has now seen his empire rocked by a week of turmoil.

The Indian tycoon has lost his title and tens of billions in personal wealth in a matter of days after a US-based short-selling firm accused him of «the biggest scam in corporate history.»

Adani dismissed the allegations, accusing the short seller, Hindenburg, of a «calculated attack» on his country.

But the claims caused a collapse at his company and shocked the markets.

On Thursday, Adani pulled out of his flagship company’s planned share offering as his conglomerate’s losses topped $100 billion, raising concerns about a possible broader impact on India’s economy.

Here’s what you should know:

What are the accusations?

Hindenburg investigation published a report on January 24 saying that the Adani Group, one of India’s largest conglomerates, had «engaged in a brazen scheme of stock manipulation and accounting fraud over the course of decades.»

He report was published days before the planned $2.5 billion share sale by Adani Enterprises, the conglomerate’s flagship company.

In addition to the accounting fraud, Hindenburg also accused the Adani Group of being involved in billions of dollars in «suspicious dealings with its chairman’s brother, Vinod Adani, and his maze of offshore shell entities,» which the company says used to purchase shares. handling.

Hindenburg has a history of exposing alleged corporate wrongdoing by placing bets against these companies, a process also known as short selling. Hindenburg disclosed that he was short in Adani’s companies through US-traded assets and non-Indian-traded derivatives. what the experts say positioned it to benefit from a drop in stock prices.

The report, which Hindenburg said was based on interviews with former executives and investigation of thousands of documents, raised concerns about high debt and the activities of top executives and concluded that seven of Adani’s companies were overvalued.

Gautam Adani’s investments span almost every sphere of Indian life, making him a household name.Kobi Wolf/Bloomberg via Getty Images

What did Adani say?

Adani’s business responded to Hindenburg, threatening legal action and accusing him of sabotaging the share sale.

“The volatility in the Indian stock markets created by the report is of great concern and has caused unwanted distress for Indian citizens,” the conglomerate said in a statement. declaration In the past week.

In other 413 page answer A few days later, Adani dismissed Hindenburg’s allegations as baseless, calling the short seller the «Manhattan Madoffs.»

«This is not simply an unwarranted attack on a specific company, but a calculated attack on India, the independence, integrity and quality of Indian institutions, and India’s history of growth and ambition,» the statement said. from Adani.

Hindenburg replied that only about 30 of those pages addressed issues raised in his report, and that Adani had not responded to 62 of his 88 questions.

«India’s future is being held back by the Adani Group, which has wrapped itself in the Indian flag while systematically pillaging the nation,» the research group said. «We also believe that fraud is fraud, even when perpetrated by one of the richest people in the world.»

Hindenburg Research and the Adani Group did not respond to a request for additional comment.

How severe has the damage been?

Although Adani denied the allegations, the report resulted in a sell-off of shares in the Adani Group’s publicly traded companies, which Bloomberg says have lost $107 billion in value.

Adani himself has lost $48.5 billion of his $120 billion fortune, according to the Bloomberg Billionaires Indexwhere he has fallen from third on the list to 13th. He has also slipped one place below his rival and fellow Indian tycoon Mukesh Ambani, chairman of Reliance Industries.

The record sell-off in domestic stocks had been seen as a measure of market confidence in Adani after the report, and he initially had enough investor support to proceed on Tuesday. But the conglomerate called it off Wednesday night, citing «market volatility.»

“This decision will have no impact on our existing operations or our future plans,” Adani said in a statement. recorded video address aimed at calming investors that was released on Thursday, its first public comments since the crisis began.

Adani said the decision to scrap the share offering was made «to insulate investors from potential losses.»

“For me, the interest of my investors is paramount and everything else is secondary,” he said. “We will continue to focus on timely executions and project delivery,” she said.

But the damage may already have been done. Since Hindenburg’s report was published on January 24, the companies in the Adani group have lost nearly half their combined market value.

«Unless Adani can regain the confidence of institutional investors, shares will plummet,» Avinash Gorakshakar, head of research at Mumbai-based Profitmart Securities, told Reuters.