Asia’s richest man has 50 billion problems that didn’t exist three days ago.

In the past 72 hours, Indian mining magnate Gautam Adani has watched on his empire plunged by US$50 billion ($76 billion) in market value.

On Wednesday NZ time, US activist investment group Hindenburg Research released a bombshell report that accused the Adani Group of purportedly carrying out fraud for years on end.

“We have uncovered evidence of brazen accounting fraud, stock manipulation and money laundering at Adani, taking place over the course of decades,” Hindenburg said in a note.

Hindenburg also revealed it had taken a short position in Adani Group — meaning it is betting that the company’s stock price will plunge.

As predicted, it triggered a bloodbath, with investors reacting to the news, sparking a mass sell-off.

On the first day, US$12 billion ($18 billion) was erased from Adani’s once US$218 billion ($335 billion) mining business, and trading paused on Thursday because of an Indian public holiday.

Then on Friday, a further US$50 billion ($76 billion) was wiped away. The eye-watering loss came after his flagship firm, Adani Enterprises, dropped by 19 per cent while Adani Green Energy and Adani Total Gas declined by 20 per cent.

Even after the Adani Group issued a statement rejecting the assertions of Hindenburg, the sell-off continued unabated.

Adani was massacred on the Indian stock market, performing the worst out of every stock on the Nifty 50 Index, when it lost more than 1.5 per cent.

The Adani Group has previously been the focus of four major government fraud investigations. Photo / Getty Images

The damning report hit particularly close to home for investors, according to an expert, because India’s corporate rules mean companies there lack the same level of transparency about how their business is operating compared to other countries.

According to Gary Dugan, CEO of the Global CIO Office, “The issues strike at the heart of the Indian corporate sector where a number of family-controlled conglomerates dominate.

“By their very nature, they are opaque and global investors have to take on trust the issues of corporate governance.”

Adani’s personal fortune has also taken a beating because much of it is staked with his businesses.

The 60-year-old multi-billionaire was officially the world’s third-richest person on Wednesday, but at the time of writing, he has now dropped to seventh place, according to Forbes’ billionaire tracker.

In all, he’s lost about US$19 billion ($29 billion) in three days.

“The Adani Group has previously been the focus of four major government fraud investigations which have alleged money laundering, theft of taxpayer funds and corruption, totalling an estimated $US17 billion,” Hindenburg stated.

 “Adani family members allegedly co-operated 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.”

Hindenburg said its two-year investigation “involved speaking with dozens of individuals, including former senior executives of the Adani Group, reviewing thousands of documents, and conducting diligence site visits in almost half a dozen countries”.

Almost immediately, the Adani group hit back against the shock claims.

Adani Group CFO Jugeshinder Singh issued a scathing statement rubbishing them as “a malicious combination of selective misinformation and stale, baseless and discredited allegations”.

Singh also lashed the timing of the report – which came just as Adani Enterprises was preparing to carry out a multibillion-dollar follow-on public offering this week.

Hindenberg has successfully taken on dozens of other companies in recent years, including Twitter and electric vehicle maker Nikola, leading to similar stock plunges.

The company brings down targets by thoroughly researching the company in question, placing a bet that its shares will fall, and then creating as much noise as possible about its research, including via social media.

- With Alex Carey