Indian billionaire Gautam Adani may just have witnessed a difficult week financially with his dream of global wealth rankings suffering a knock-out punch. It all began with a newspaper report this week putting a question mark on some offshore investors, which has a domino effect on 6 listed stocks. As a result, the 6 listed stocks under the conglomerate tumbled & lost more than lost 1.91 trillion, according to a report by Reuters.

According to a report quoting Bloomberg Billionaires Index, the 58-year-old ace Indian tycoon has lost more money this week through Thursday than anyone else in the world, with his personal fortune tumbling by about $13.2 billion to $63.5 billion.

This week, 4 out of 6 Adani group stocks landed in red. Cumulatively, the six stocks lost 1.91 trillion – which is equal to $25.83 billion.

Meanwhile, the freefall of the shares of the Adani companies, which are in the businesses of operating airports & ports, power generation and transmission, coal and gas trading, continues.

How it all began

The crisis was offset this week after the Economic Times reported on the freezing of three Mauritius-based funds which are the contributors as foreign investors in the Adani group by the National Securities Depository Ltd.

Bulk of 3 Mauritius-origin funds – Albula Investment Fund, Cresta Fund & APMS Investment Fund – amount to about $6 billion. The impact of profit & loss is felt by the Adani group as the bulk of the holdings by these three firms are shares of firms owned by Adani.

The 3 funds were frozen as of May 31, among thousands such others, according to the NSDL website, Reuters reported. No reason has been cited for freezing funds.

However, the exact date of the freeze is unknown.

How the Adani group reacted

Downfall in shares has been met with denials & contradictions as the Adani Group firms have termed the media reports as “blatantly erroneous”. The companies have said that the accounts holding funds of Adani shares are not frozen.

NSDL & India’s securities regulator SEBI have not commented on the matter so far, Reuters reported.

A spokesperson for the Adani Group declined to comment beyond the exchange filings sent this week. These overseas funds “have been investors in Adani Enterprises Ltd. for more than a decade,” Adani Group said in a June 14 statement. “We urge all our stakeholders not to be perturbed by market speculations.”

The freeze is “not new”, a senior NSDL official told Reuters on the condition of anonymity. The official added that the funds have multiple accounts & that the Adani shares were held in other accounts that were not frozen.

The ripple effect

Rout in stocks began on Monday when Adani group stocks fell by 0.4-8.5% on Monday. Starting the next day, the Adani group stocks fell between 7.1%-22.6% over the week compared with last Friday’s close, wiping out nearly 22% of the gains in the year preceding this week, Reuters reported.

As a result, the cumulative market capitalisation of Adani firms declined by over a 6th.

Flagship Adani Enterprises rose 8.76% & Adani Ports rose 7.33% on Friday, but the four other Adani stocks each closed 5% lower.

What we know about the frozen funds

The 3 foreign funds – Albula Investment Fund, Cresta Fund & APMS Investment Fund – are all registered at the same address, according to the Mauritius financial regulator.

Funds cumulatively control 2.7% of all shares in the Adani Group companies as on June 11, calculations based on an e-mail sent by Adani executive to NSDL & reviewed by Reuters showed.

2 other Mauritius-based funds that are also investors in Adani companies – LTS Investment Fund & Asia Investment Corp – are also registered at the same address.

Reuters was unable to find a website for all five funds, and calls to the phone numbers provided to Mauritius regulators went unanswered.

The five funds deployed 94.4%-97.9% of their total capital in Adani companies’ shares, data by Indian stocks analysis firm Trendlyne showed.

Reuters could not independently verify Trendlyne data.

Four of the six Adani stocks have a public shareholding of about 25% – the minimum level mandated by regulators for companies listed on Indian exchanges.

Indian stock exchange data shows most shares of Adani Group companies are held by trusts controlled by Adani. Foreign portfolio investors are the next largest shareholders, while retail and domestic investors typically control about 5%.

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