Adani Group’s stocks and bonds have declined for the second day on Friday after a U.S. arrest warrant was issued for its founder Gautam Adani over an alleged $265 million bribery scheme.
Adani Green Energy, which the case centers around, saw its stocks decline 8 percent in early trading and has lost around $7 billion in market value since the news of the indictment. Since then, the stock regained some of its losses, gaining 1.77 percent. The conglomerate’s stocks have seen their combined market value drop by $33 billion.
U.S. prosecutors charge Adani and seven others
U.S. prosecutors charged Adani and seven other people with agreeing to pay bribes to Indian government officials to obtain contracts that could yield $2 billion of profit over 20 years as well as to develop India’s largest solar power plant project. The prosecutors added that the Adanis and former Adani Green Energy CEO Vneet Jaain raised more than $3 billion in loans and bonds by hiding their corruption from lenders and investors. The three directors’ charges were securities fraud, securities fraud conspiracy, and wire fraud conspiracy.
In response, Adani Group said the accusations by U.S. federal prosecutors and the U.S. Securities and Exchange Commission are “baseless and denied” and that it will seek “all possible legal recourse”.
The allegations come less than two years after Hindenburg Research accused the group of improper use of tax havens and involvement in stock manipulation in February 2023, which the group also denied.
S&P Global to lower company ratings
S&P Global warned in a statement that the group will need regular access to equity and debt markets given its large growth plans. However, that access could now be hampered. “We believe domestic, as well as some international banks and bond market investors, look at Adani entities as a group, and could set group limits on their exposure,” it said.
S&P added it could lower the ratings on Adani Electricity, Adani Ports, and an Adani Green Energy subsidiary if the companies started to face weakening funding access and greater funding costs.
Read: Adani stock price plummets following U.S. indictments of chairman Gautam Adani
Kenya cancels $2 billion deal
Kenya has also canceled a procurement process worth nearly $2 billion which the market expected to award control of the country’s main airport to the Adani Group. It also retracted a separate 30-year, $736-million public-private partnership deal, that an Adani Group firm signed with the energy ministry last month to construct power transmission lines. Adani Green also canceled a scheduled $600 million U.S. bond sale.
