This mogul lost $73 billion in days. Who is he and what happened?

Here’s what you need to know about the Adani Group, its founder and Hindenburg Research.

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Adani Group has reached new heights in recent years.

Adani started a polymer import-export business in the 1980s and gradually expanded into infrastructure.

In the 1990s, he began building a port at Mundra in his home state of Gujarat. He later expanded his portfolio to include coal mines, power plants and airports. In the last decade he secured one of his biggest international deals – the Carmichael project in Queensland, one of the world’s largest open pit coal mines.

Last year, the Adani Group bought a cement business in India from Holcim, a Swiss-based multinational construction company. In another sign of diversifying his business, Adani took control of NDTV, an independent news agency.

The success of the Adani conglomerate has in some ways paralleled the growing Indian economy, which is the fifth largest in the world. Adani, 68, has styled himself as an industrialist helping to fix his country’s lacking infrastructure.

Critics say Adani’s political connections set him apart.

The Adani Group would not be where it is, its critics say, without its founder’s closeness to Prime Minister Narendra Modi, who has helped the company win lucrative contracts or, in some cases, completely changed bidding rules.

Like Adani, Modi is from Gujarat, and when Modi became prime minister in 2014, he flew to New Delhi on an Adani plane. Adani’s relationship with Modi has led to a widespread perception in India that Adani can strike any deal he wants, creating an unlevel playing field.

Adani has denied claims of preferential treatment. The foundations of his business, he said in a recent interview, were laid in the 1980s when the Indian government eased trade restrictions.

“My professional success is not due to a single leader, but to the political and institutional reforms initiated by multiple leaders and governments over a long period of more than three decades,” Adani told the magazine India today.

Adani faced controversy ahead of Hindenburg’s allegations. The billionaire has generally kept a low profile despite becoming one of the richest men in the world. He is a follower of the Jain religion, which emphasizes asceticism, and he and his family tightly control his conglomerate. (Hindenburg has criticized his company’s ownership structure.)

examination, allegations

Months before Hindenburg made his allegations, the dizzying rise in shares of an Adani subsidiary came under scrutiny. Much of the trading activity at subsidiary Adani Enterprises was traced to holding companies based in tax havens, leading to speculation that the shares – which had helped boost Adani’s personal wealth – were being rigged. According to Hindenburg, shares in Adani’s seven subsidiaries have increased by more than 800 percent over the past three years.

Adani’s company previously faced investigations into allegations of tax impropriety related to coal imports, but was eventually acquitted. Adani has also been linked to an Indian stock manipulation scam devised by a Mumbai stockbroker, Ketan Parekh.

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As Adani’s business empire has grown, he has turned to foreign banks to fund his acquisitions and investments. That, said Buckley, the Sydney-based analyst, could mean closer scrutiny.

“The big problem is that Adani has spent the last four years borrowing from Wall Street,” Buckley said. “If you’re raising money in America, you have to obey American rules.”

Hindenburg has a good track record.

Hindenburg, named after the famous doomed airship, is known on Wall Street as an activist short seller. The company hunts down fraud and other irregularities in public markets, exposes the wrongdoing and makes money in the process. It benefits when its target, often a publicly traded company, sees its stock price fall.

Activist short sellers have been criticized by some for betting against companies. The shorts say they help monitor the market.

Hindenburg, which is only a few years old, has targeted about 30 companies and made a name for itself by taking down electric vehicle maker Nikola. According to Bloomberg News, shares in these companies fell an average of 15 percent the day after the Hindenburg reports were released, and 26 percent six months later.

Take on a Goliath

In the Adani group, Hindenburg’s founder Nathan Anderson has messed with a Goliath. Hindenburg said she researched Adani’s deals for two years before publishing her report on Jan. 24. The Adani group has threatened to sue Hindenburg, who responded that she would welcome a lawsuit in the United States, where she could demand Adani documents as part of legal discovery.

Hindenburg’s allegations include that offshore stamp companies run by Adani’s older brother Vinod Adani helped the conglomerate manipulate its share prices. The shell companies are also used to launder money from private Adani companies to the publicly traded companies, Hindenburg said, “to maintain the appearance of financial health and solvency.”

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Highlighting what it described as “apparent accounting irregularities and sketchy deals,” Hindenburg said the fact that the publicly traded Adani companies had no long-standing CFOs was a red flag. The short seller also questioned the quality of the independent auditor for two subsidiaries, Adani Enterprises and Adani Gas. The chartered accountant’s staff were “essentially fresh out of school and barely equipped to audit and hold to account the finances of some of the largest companies in the country.”

Hindenburg went on to say that even if his allegations were ignored, Adani Group companies are so overvalued that their shares could fall 85 percent. The group, Hindenburg added, was also over-indebted.

The Adani Group has called Hindenburg’s allegations an attack on India and his “growth history and ambitions”. Hindenburg counters by saying, “India’s future is being held back by the Adani group, who have draped themselves in the Indian flag while systematically looting the nation.”

The fight could have geopolitical implications as the United States is courting India as a counterweight to China as part of a grouping called Quad, which also includes Japan and Australia, Buckley said. How the conflict is to be resolved is unclear, but one thing is certain, he said: “It will be very complicated.”

This article originally appeared in The New York Times.

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