February 9: Allegations of stock market manipulation and fraud have halved the net worth of Indian tycoon Gautam Adani, one of the wealthiest people in the world, and wiped out more than US$ 110 billion from his listed firms in India in less than two weeks.

Forbes magazine ranked Adani as the third-richest person in the world. But a recent stock rout has caused his fortune to take a nosedive, as he faces allegations of stock manipulation and debt concerns by US-based short-seller Hindenburg Research.

According to data from Forbes, Adani had a net worth of US$ 2.8 billion in 2014, just before Narendra Modi – who is from the same state of Gujrat where Adani comes from – was elected as India’s prime minister. That wealth had catapulted to US$ 126.4 billion until the Hindenburg Research report on January 24 sent his business, which involves ports, airports, gas distribution, green energy, data centres, agri logistics, edible oil, and power generation and transmission, among others, into crisis, reported Al Jazeera.

According to the Doha-based media network, the Hindenburg report alleged that Adani family members cooperated to create offshore shell entities in tax-haven jurisdictions like Mauritius, the United Arab Emirates and several Caribbean islands, generating forged import/export documentation in an apparent effort to spur fake or illegitimate turnover and siphon money from the listed companies.

The Adani Group has defended itself stating that the report was issued with a “mala fide intention” to damage its reputation, days before the group was set to hold a public secondary share sale to raise $2.5bn, the largest such sale in the country. The Adani Group has alleged that the report’s “principal objective” was to derail the share offer.

With investor confidence shaken, legislators have demanded an investigation into his businesses as his listed companies’ shares slipped. However, the latest reports have indicated that the shares of his companies have improved in the last three days.

The Hindu, one of the leading newspapers of India, wrote that the fall in shares of Adani Group will have implications on businesses and economies of India as well as its neighbouring countries Nepal, Bangladesh and Sri Lanka.

The newspaper argues that Nepal’s hydropower sector will be particularly affected as Adani Group was planning to build infrastructures related to trans-border transmission lines that would connect Nepal, Bhutan, India, Bangladesh and possibly Sri Lanka in the future.

The newspaper revealed that Adani Group had shown special interest in hydropower projects in Karnali after the then Prime Minister of Nepal Sher Bahadur and Indian PM Modi issued a joint statement of cooperation in hydropower sector during  Duba’s state visit to India last year.

The group had made verbal proposal during unofficial discussions to invest in various hydropower projects and transmission lines within Nepal and also for the cross-border transmission lines.

However, Adani Group has not signed any kind of investment agreement with Nepal in regard to the hydropower sector and therefore the fall in shares of the group will not have any implications on Nepal, argues Aashish Garg, vice president of the Independent Power Producers Association of Nepal (IPPAN).

“It seems that the Adani  Group has not invested a single penny in Nepal. It is normal for a big company to show interest in hydropower sector of Nepal,” said Garg, adding, “In the present context, the crisis faced by Adani Group will not have any impact in Nepal.”

The Investment Board Nepal also clarified that Adani Group had shown interest through various means to invest in Nepal but have not held any official discussion in this regard.

IBN’s Spokesperson Amrit Lamsal confirmed that the group has not had any official agreement with Nepal for investment.

Nepal Electricity Authority’s Spokesperson Suresh Bhattarai also said that the state-owned power utility has not signed any such agreement with Adani Group.

Bhattarrai further said that even if such a big business conglomerate wishes to invest in Nepal, there won’t be any problem for source of funding.