Adani Stocks Plunge After US Charges Bribery, Fraud Charges

Shares of Adani group companies plunged on Friday after the Indian billionaire was indicted by US prosecutors in New York, who accused him of a role in an alleged multi-billion-dollar bribery and fraud scheme on Wednesday.

The stock of Adani Enterprises, the group flagship, fell by 20%, while shares of Adani Ports and Special Economic Zone were down about 17% and Adani Power stock dropped by 11.3%. Shares of ACC, Ambuja Cements, Adani Wilmar, NDTV and Adani Total Gas also saw falls of at least 10% on Thursday.

This is the group’s biggest market crisis since revelations by Hindenburg Research group on alleged improper use of offshore tax havens early last year, which wiped over $150 billion off the group’s market cap.

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Moody’s Ratings said on Thursday: “The indictment of Adani Group’s chairman and other senior officials on bribery charges is credit negative for the group’s companies,” according to the Times of India.

Moody’s said the key assessment centred on the capacity of group companies to secure capital to meet liquidity requirements and governance standards.

‘$265m in bribes for solar contracts’

US authorities said Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay about $265 million in bribes to Indian government officials to obtain solar energy supply contracts expected to yield $2 billion of profit over 20 years.

According to an indictment, some conspirators referred privately to Gautam Adami – India’s second richest man – with the code names “Numero uno” and “the big man,” while Sagar Adani allegedly used his cellphone to track specifics about the bribes.

Prosecutors also said the Adanis and another executive at Adani Green Energy, Vneet Jaain, raised more than $3 billion in loans and bonds for that company by concealing the corruption from lenders and investors.

The case involves alleged violations of the Foreign Corrupt Practices Act, a US anti-bribery law.

Adani Group did not immediately respond to requests for comment outside business hours in India, where the charges were announced early Thursday morning.

India’s embassy in Washington did not immediately respond to requests for comment. Lawyers for the defendants could not immediately be identified.

Gautam Adani, 62, is worth $69.8 billion according to Forbes magazine, making him the world’s 22nd richest person and India’s second-richest person behind Reliance Industries chair Mukesh Ambani.

Among the other defendants are Ranjit Gupta and Rupesh Agarwal, respectively a former chief executive and former chief strategy and commercial officer of Azure Power Global, and Cyril Cabanes, a director there.

The other defendants, as well as Cabanes, also worked for a Canadian institutional investor, prosecutors said.

Seven of the defendants are Indian citizens who lived in India during the relevant period, while Cabanes is a dual French-Australian citizen who lived in Singapore, prosecutors said.

Arrest warrants issued for Adanis

According to court records, a judge has issued arrest warrants for Gautam Adani and Sagar Adani, and prosecutors plan to hand those warrants to foreign law enforcement.

The US Securities and Exchange Commission filed related civil charges against Gautam Adani, Sagar Adani and Cabanes.

Last week, Gautam Adani said in a post on social media platform X that his conglomerate planned to invest $10 billion in US energy security and infrastructure projects, creating a potential 15,000 jobs, without providing a timetable.

Adani announced the investment while also congratulating US President-elect Donald Trump on his election win.

Trump has pledged to make it easier for energy companies to drill on federal land and build new pipelines.

In January 2023, the US-based short-seller Hindenburg Research accused Adani Group of using offshore tax havens improperly, a charge the company denied. The report sparked an approximately $150 billion meltdown in Adani Group stocks.

The charges were announced hours after Adani on Wednesday raised $600 million from a sale of 20-year “green” bonds.