Adani logo and decreasing stock graph is seen in this illustration taken January 31, 2023. [Source: Reuters]

Adani Group sought to reassure investors on Monday, saying it had strong cashflows and its business plans were fully funded, as an Indian regulator confirmed it was investigating a critical report by a short-seller that has battered the group’s stocks.

Led by billionaire businessman Gautam Adani, the group’s seven listed stocks have together lost about $120 billion in market value since a Jan. 24 report by U.S. short-seller Hindenburg Research accused it of improper use of offshore tax havens and stock manipulation, allegations the group has denied.

The turmoil continued on Monday, with shares in the listed companies extending their losses.

Seeking to calm investors, the conglomerate in a statement to Reuters said the balance sheet of each of its independent portfolio companies was “very healthy”, adding it had secure assets and strong cashflows, with its business plans “fully funded”.

“We are confident in the continued ability of our portfolio to deliver superior returns to shareholders,” Adani Group said in the emailed statement.

Bloomberg News reported on Monday the group had halved its revenue growth target and planned to scale down capital spending. A company spokesperson told Reuters earlier in the day the report was “baseless, speculative”, without elaborating.

The Adani crisis has sparked worries of financial contagion in India, protests in parliament where lawmakers have demanded an investigation, ratings outlook downgrades of some Adani units and cast a shadow on the group’s capital raising plans. Gautam Adani has also lost his crown as Asia’s richest person.

Adani Group’s statement said “once the current market stabilises, each entity will review its own capital market strategy.”

The Securities and Exchange Board of India (SEBI) has been probing the market rout, including examining trade patterns and any potential irregularities in the $2.5 billion share sale of flagship company Adani Enterprises (ADEL.NS) that the Adani group was forced to cancel due to the stock’s plunge, Reuters has previously reported.

SEBI confirmed the existence of the investigation for the first time in a Supreme Court filing.

“SEBI is already enquiring into both the allegations made in the Hindenburg report as well as the market activity immediately preceding and post the publication of the report,” the regulator said in the filing seen by Reuters, adding the matter was in early stages of examination.

During a court hearing on Monday where the Supreme Court heard public interest petitions that raise concerns about steep investor losses, India’s Solicitor General Tushar Mehta, arguing on behalf of the government and SEBI, said there was no objection if a panel was setup to examine protection mechanisms for investors. The judges told him to come back with the remit of such a panel, and scheduled a further hearing for Friday.

SEBI is set to brief federal finance ministry officials on Feb. 15 on its investigation into the shelved share sale, two sources told Reuters on Monday. SEBI and the finance ministry did not respond immediately to Reuters requests for comment.

Last week, Moody’s downgraded the ratings outlook for some Adani companies, while index provider MSCI said it would cut the weightings of some in its stock indexes.

On Monday, all stocks of the Adani group were under pressure. Adani Enterprises fell 7%, while Adani Total Gas (ADAG.NS), Adani Power (ADAN.NS) and Adani Transmission (ADAI.NS) lost 5% each.

Adani Total, a joint venture with France’s TotalEnergies (TTEF.PA), has lost 70% since the Hindenburg report, while Adani Enterprises is down 50%.