What to know about the fight between Asia’s richest man and Hindenburg

• $12 billion market value wiped off Adani Group companies the day Hindenburg's report was released.

• Gautam Adani ranks 4th in the Bloomberg Billionaires Index, above the likes of Bill Gates and Warren Buffett.

• Hindenburg sees 85%+ of downside for Adani-listed firms "purely on fundamentals."

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In a David versus Goliath battle, a small New York short seller is taking on Asia's richest person. Hindenburg Research's allegations against Adani Group are threatening to unravel the meteoric rise of 60-year-old Indian tycoon Gautam Adani, whose wealth surged by $44 billion in 2022 when many billionaires saw their fortunes shrink.

In an almost 100-page report, Hindenburg has accused Adani Group of "pulling the largest con in corporate history," having "engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades." In response, the conglomerate has called the firm's report "a malicious combination of selective misinformation and stale, baseless and discredited allegations."

Short selling is a centuries-old, sometimes controversial strategy where a short seller alleges bad practices in a company and publicizes it, seeking to profit. While issuing its report, Hindenburg said that it had taken a short position in Adani Group companies through US-traded bonds and non-Indian-traded derivative instruments.

As both sides dig in, the stakes are rising for Adani and Indian markets.

Why it matters

Adani's personal fortune of over $100 billion is built on a sprawling business empire that encompasses numerous industrial powerhouses in India. This includes the country's largest private-sector port and airport operators, coal mining and trading, distribution of natural gas, and more recent forays into media and cement.

Questions have long swirled around the Adani Group's finances, but the latest salvo from Hindenburg is its biggest challenge yet. Led by Nathan Anderson, its research has claimed numerous corporate scalps in the past. Hindenburg's short bets against electric-vehicle maker Nikola Corp. preceded a plunge of over 90% in the company's stock, with founder Trevor Milton convicted of defrauding investors in October. The research firm has targeted about 30 companies since 2020, and their shares have fallen on average by 26% six months later, according to Bloomberg News calculations.

The broadside also comes at a sensitive time for Adani. As a close ally of Indian Prime Minister Narendra Modi, the tycoon has been seeking to diversify his empire and mount ambitious expansion plans abroad. Hindenburg's report also landed right before a $2.5 billion share sale in Adani Enterprises for institutional investors. Its ability to fend off the accusations will have ramifications not just for the businessman's own goals but also global confidence in the integrity of Indian markets.