Adani Group companies lost around $27 billion in market value on Thursday after U.S. prosecutors charged the Indian billionaire Gautam Adani in an alleged $265 million bribery and fraud scheme of Indian officials, plunging his group into crisis for the second time in two years.
Gautam Adani’s Adani Enterprises closed over 23 percent lower in its worst one-day drop since February last year. Adani Ports, Adani Total Gas, Adani Green, Adani Power, Adani Wilmar, Adani Energy Solutions, ACC, and Ambuja Cements also fell between 7 percent and 19 percent. The sharp selloff had dropped the capitalization of the 10 Adani-backed companies to about $142.6 billion by 10:33 GMT, from $169.1 billion on Tuesday.
GQG Partners, an Australia-listed investment firm that is a major Adani backer, also saw its shares slide 20 percent, its largest one-day fall since it listed three years ago.
According to Forbes, Gautam Adani is worth $69.8 billion, making him India’s second-richest man after Mukesh Ambani.
Second allegations in less than two years
In a statement, Adani Group dismissed the accusations as “baseless and denied”. In addition, it vowed to 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.
Late Wednesday, U.S. authorities said Gautam Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay about $265 million in bribes to Indian government officials for contracts expected to yield a profit of $2 billion over 20 years and develop India’s largest solar power 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. Notably, Adani Green Energy canceled plans to raise $600 million in U.S. dollar-denominated bonds after the news. The three directors’ charges were securities fraud, securities fraud conspiracy, and wire fraud conspiracy.
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SEC charges Adanis in civil case
The Adanis were also charged in a U.S. Securities and Exchange Commission (SEC) civil case. In a statement, the SEC said: “As alleged, Gautam and Sagar Adani were engaged in the bribery scheme during a September 2021 note offering by Adani Green that raised $750 million, including approximately $175 million from U.S. investors. The Adani Green offering materials included statements about its anti-corruption and anti-bribery efforts that were materially false or misleading in light of Gautam and Sagar Adani’s conduct.”
Sanjay Wadhwa, acting director of the SEC’s division of enforcement, said that Gautam and Sagar Adani induced U.S. investors to buy Adani Green bonds through an offering process that misrepresented not only that Adani Green had a robust anti-bribery compliance program but also that the company’s senior management had not and would not pay or promise to pay bribes, and Cyril Cabanes, a former member of Azure Power’s board of Directorsd, participated in the bribery scheme while serving as director of a U.S. public company.
