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Shares of Adani Group companies were trading in the red zone on Wednesday following a report by Hindenburg Research that claimed that the Indian giant had participated in a clear stock manipulation and accounting fraud scheme over decades.

For two years, the forensic financial research firm had been conducting its investigation.

According to the report, Gautam Adani, the founder and chairman of the Adani Group, has a net worth of about $120 billion, which he has increased by over $100 billion in the last three years primarily as a result of stock price growth in the group's seven most important publicly traded companies, which have increased by an average of 819 percent during that time.

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Numerous people, including former Adani Group senior executives, were interviewed for the research, thousands of documents were examined, and due diligence site visits were made in close to a dozen different nations.

"Even if you ignore the findings of our investigation and take the financials of Adani Group at face value, its seven key listed companies have 85% downside purely on a fundamental basis owing to sky-high valuations," said the forensic financial research company in its report.

The key listed Adani companies have also incurred significant debt, notably by pledging shares of their inflated stock as collateral for loans, placing the group's overall financial situation in risk.

The Adani Group has reportedly been the subject of four significant government fraud investigations that have been estimated to have cost US$ 17 billion in total and have included allegations of money laundering, theft of tax dollars, and corruption.

"Adani family members allegedly cooperated to create offshore shell entities in tax-haven jurisdictions like Mauritius, the UAE, and Caribbean Islands, generating forged import/export documentation in an apparent effort to generate fake or illegitimate turnover and to siphon money from the listed companies," said Hindenburg Research in its report.

Shares of Adani Total Gas, Adani Enterprises, Adani Transmission, Adani Green Energy, Adani Ports & Special Economic Zone, Adani Power, and Adani Wilmar were trading 1-4 percent lower in Wednesday's trade.

Reacting to the news, the seven Adani Group stocks lost 46,086 crore in market cap on Wednesday.

Adani Total Gas lost 12,366 crore on Wednesday, followed by Adani Ports that lost 8,342 crore and Adani Transmission, which lost 8,039 crore.

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