The investment arm of Goldman Sachs Group Inc. dramatically reduced its exposure to the Adani Group in its ESG portfolios in the weeks following allegations of fraud against the conglomerate by short-seller Hindenburg Research.

Goldman funds registered as promoting environmental, social and governance goals under European Union rules sold about 11.7 million shares in Adani companies in February, according to data compiled by Bloomberg. Following the retreat, Goldman Sachs Asset Management’s actively managed ESG fund exposure to Adani was limited to a stake of roughly 400,000 shares in Ambuja Cements Ltd., the data show.

Other asset managers cutting Adani from ESG funds include Northern Trust Corp. and Storebrand ASA, according to Bloomberg data, which doesn’t include exchange-traded funds and is based on an analysis of the latest available filings. In all, 13 actively managed ESG funds scaled back their holdings in the conglomerate, selling a total of 12 million Adani Group shares, with Goldman accounting for the largest sales in the Bloomberg data.

A spokesperson for Goldman Sachs declined to comment. Spokespeople for Northern Trust and Storebrand didn’t immediately respond to requests for comment.

Meanwhile, Adani companies are trying to tap markets in what would mark an important milestone for the group after Hindenburg Research published its Jan. 24 report alleging the conglomerate was guilty of market manipulation and fraud. Adani, which saw the market value of its empire shrink by more than $100 billion after the Hindenburg report was published, has repeatedly refuted the claims made by the short seller and is now trying to rebuild relations with financial markets.

Adani Enterprises Ltd. and Adani Transmission Ltd. will seek to raise as much as $2.6 billion in total, according to separate filings on May 13. The companies still need shareholder approval for the transaction.

“Goldman Sachs cutting Adani group stakes from ESG funds and Adani Group companies now seeking to raise capital are two entirely separate events,” a spokesperson for Adani said by email. “The former is related to the market sale of equity shares in the secondary market, where the group or group companies have no role to play. On the other hand, the latter is related to enabling provisions for the primary issue for capital raising by the two group entities, Adani Enterprises Ltd. and Adani Transmission Ltd. We do not foresee any change or impact of the former on our fund-raising plans, as the two events are completely unrelated.”

Overall, the number of ESG funds, including ETFs, with direct holdings in Adani companies dropped to 59 from 90 at the beginning of February, according to Bloomberg data. Including indirect holdings, the number of ESG funds exposed to Adani is broadly unchanged at just over 500.

In March, Adani won a vote of confidence from a major investor after GQG Partners bought shares worth a total of $1.9 billion in four of the group’s companies. And even some ESG-registered funds — Bloomberg data identified eight in total — have added exposure to Adani since Hindenburg published its report.

Since the allegations of fraud were published in late January, Adani companies have been ejected from a number of key indexes and rankings. Adani Transmission, which has seen its share price plunge almost 70% this year, will be dropped from MSCI Inc’s India index at the end of this month. The company also will be removed from a local tally of firms designated for so-called additional surveillance measures, along with Adani Green and Adani Total Gas Ltd., according to a list updated on the websites of the country’s two largest exchanges earlier this month.

And a United Nations-backed organization created to help companies establish credible net zero targets, the Science Based Targets initiative, has removed three Adani companies from a list monitored by green investors. The decision means that Adani Green, Adani Transmission and Adani Ports & Special Economic Zone Ltd. are no longer listed as “companies taking action” to reduce their emissions in line with the goals of the Paris climate accord.

--With assistance from Carlo Maccioni and Amine Haddaoui.