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Adani stock prices dropped spectacularly after US prosecutors indicted Gautam Adani and seven associates in a US$250 million bribery and fraud case. The Adani bribery charges case, under the US Foreign Corrupt Practices Act, alleges that the group paid US$265 million in bribes. The Adani group bribed Indian officials to secure solar energy contracts projected to yield billions in profits.
The indictment also alleges that the Adani group and his team members had misrepresented statements to raise more than US$3 billion in loans and bonds. The charges put six of the major Adani stocks in the red. The scandal created a huge ruckus in the stock market.
The biggest casualties were Adani Enterprises and Adani Ports, which both lost 10% on the Nifty index. The Adani Energy Solutions and Adani Total Gas opened with a 20% lower circuit. NDTV shares plunged by 11%, while Adani Green Energy lost 19%.
Cement companies under the group also faced steep falls, so ACC, Adani Wilmar, and Ambuja Cement hit a 10% lower circuit each. Repercussions in the Broader Markets Due to Adani Group The entire controversy over the Adani Group adversely impacted the overall market. Stocks in SBI, Dr.
Reddy's Laboratories, and Britannia began in red as well. Thus, portraying that investors lost faith across all boards. The US indictment stated that the accused orchestrating a scheme used code names like ‘Numero Uno’ and ‘The Big Man’ while referring to Gautam Adani.
Deputy Assistant Attorney General Lisa H. Miller further drew attention to the scale of the alleged bribery, deception, and obstruction of justice Adani and his associates indulged in. Arrest warrants have been issued for Adani, his nephew Sagar Adani, and others involved in the case.
However, the Adani Group sold US$600 million in an over-subscribed US bond sale last night, hours before charges were announced. These accusations will be a legal headache serving a major blow to the reputation of the group. This is not the first fraud and wrong trade practices accusation against Adani.
In January 2023, Hindenburg Research published a report on the Adani group alleging stock manipulation and improper use of tax havens. After the report’s findings came to light, US$150 billion was eroded from Adani's stock value. Adani denied those claims, but ongoing lawsuits have added to the group’s woes.
The report came right as the news aired that Gautam Adani will become a Trillionaire by 2028, joining the ranks of people like Elon Musk. The Indian Billionaire saw a 123% business growth rate according to Informa Academy in its report on World’s Trillionaires. Read more Just when the charges became public, Gautam Adani announced a new investment in green energy.
At the same time, he also congratulated US President-elect Donald Trump on his election win. This move by Adani fuelled rumours about the timing and motive behind such an action. Trump's promises of energy deregulation may have prompted Adani to focus on his green energy aspirations.
Adani Group’s long-term stability and reputation stand on precarious ground as investigations continue. Further updates are expected with Adani Group's response to the charges..
