MUMBAI Billionaire Anil Ambani's Reliance ADA Group on Wednesday blamed a sharp drop in its stocks on what it said was a series of "baseless and motivated rumors" spread by rivals, and said it had complained to the market regulator.
Shares in his firms were bludgeoned in a late sell-off despite an absence of company-specific news, wiping out about $2.5 billion in market value from the group's six listed companies.
In recent months as broader weakness in Indian stocks has been exacerbated by a series of corruption scandals, including an investigation into the issuance of mobile phone licences that may have cost the state $39 billion in revenues, putting a focus on corporate governance.
On Wednesday, Reliance Infrastructure dropped as much as 25 percent before finishing nearly 19 percent lower. Reliance Communications, India's No. 2 cellular carrier, lost as much as 18 percent, touching an all-time low, before ending 14.3 percent lower.
The group did not name the companies it was accusing of spreading rumours.
"This has been accompanied by vicious and illegal bear hammering of our listed stocks, to create panic and destabilise the markets," a group spokesperson said in an emailed statement.
It said it had asked the Securities and Exchange Board of India (SEBI) and the stock exchanges to investigate.
Firms controlled by the two Ambani brothers, who last year called a truce in their long-running feud, are frequently the subject of market talk.
Anil Ambani, an avid runner who is married to a former Bollywood actress, was ranked as the world's 36th richest man by Forbes in 2010. His older brother Mukesh, who controls energy-based conglomerate Reliance Industries, ranks fourth on the global rich list.
Indian shares hit 7-month closing lows on Wednesday after the benchmark Sensex ended about 1 percent lower.
Prakash Diwan, head of institutional business at Networth Stock Broking, said the market was "going through a phase of major crisis of confidence", which meant that rumours were more readily seized upon.
A spokeswoman for the National Stock Exchange said it had not yet received any communication from the Reliance ADAG Group on the matter. Officials at SEBI and the Bombay Stock Exchange could not immediately be reached for comment.
Reliance Power, the most valuable group firm, with a market cap of about $7 billion, ended nearly 9 percent lower.
Reliance Communications shares hit an all-time low of 90.8 rupees before recovering to close at 94.85 rupees.
Reliance Comm, which had debt of $6.4 billion at the end of September, has seen its shares battered amid fierce competition and after it failed in efforts last year to sell a 26 percent stake in itself and to merge its tower unit with a rival.
In November, a government audit report said Swan Telecom, which was later renamed Etisalat DB, was given a licence despite a unit of Reliance Comm holding over 10 percent of equity, which was a violation of rules.
Reliance Comm has said the group did not have any shareholding in Swan when licences were awarded in January 2008.
Late on Tuesday, Indian authorities arrested Shahid Balwa, vice chairman of Etisalat DB, the venture between DB Group and Abu Dhabi's Etisalat, as part of the telecoms probe. Shares in DB Realty, where Balwa is managing director, fell as much as 20 percent on Wednesday.
Wednesday's accusations by the Anil Ambani group against rivals were not its first. In late 2009, Reliance Comm said details of a special audit report on its accounts were selectively leaked in conspiracy with corporate rivals.
In April 2009, the group filed a complaint alleging that "business rivals" were behind an attempted sabotage of a helicopter belonging to Anil Ambani, though police at the time said they ruled out business rivalry.
(Additional reporting by Devidutta Tripathy in New Delhi; Editing by Aradhana Aravindan, Paul de Bendern and Will Waterman)