November 21, 2024 - Adani Group shares have plummeted up to 20% after news broke of the indictment of Indian billionaire Gautam Adani in New York, US, over alleged bribery and securities fraud. US authorities have charged the Adani Group chairman with allegedly plotting a scheme to bribe Indian officials in exchange to allegedly secure solar power contracts that would generate more than $2 billion in profit.

The US Department of Justice and SEC announcement was related to a Court order that has charged seven senior Adani Group executives including Sagar Adani. According to the indictment, more than $250 million were “offered and promised” to officials in the Indian government between 2020 and 2024. These were a part of the scheme which, say US Federal prosecutors, was allegedly concealed from investors and the US banks from which the Group raised billions of dollars.

US deputy assistant attorney-general Lisa Miller said in a statement: “This indictment alleges schemes to pay over $250 million in bribes to Indian government officials. These offences were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of US investors.”

The US Securities and Exchange Commission charged in a parallel civil case that the purported payments were made to "secure (the Indian government's) commitment to purchase energy at above-market rates that would benefit Adani Green and Azure Power," two of India’s renewable energy firms.

When Indian markets opened today, shares of Adani's listed companies crashed. This was the Group’s worst trading day since early 2023 following the Hindenburg controversy. The company saw a 20% sharp decline in its flagship company Adani Enterprises and a 16.4% decline in its ports operation. The total market capitalisation of all 11 Adani stocks went down by around Rs 2.25 lakh crore to Rs 12 lakh crore. Adani’s net worth also rocketed down by $10.5 billion to $59.3 billion, as per the Forbes’ Real-Time Billionaires List.

A result of the impact was Adani Green Energy Ltd. calling off its $600 million bond offering. It was priced at around 7.45-7.5%. The purpose of the funds was to enable fresh project finance by releasing resources from an existing $3.4 billion revolving credit arrangement.

Meanwhile, the Adani Group has dismissed the allegations made against it by the US Department of Justice and the SEC against its directors calling them "baseless and denied."

A spokesperson for the Group said, "The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied. As stated by the US Department of Justice itself, 'the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.'"

The Group spokesperson further said, "All possible legal recourse will be sought."

With Media Inputs