The Adani Group, which is one of the largest Indian companies and the most prominent global players in the energy sector, finds itself facing American accusations that may threaten its financial standing and reputation.
The charges, announced by US prosecutors, relate to the group providing bribes amounting to $265 million to Indian government officials to obtain contracts to supply solar energy. The accusations caused the group to lose $27 billion in market value in one day.
Case details
The American prosecution filed a five-item indictment against Indian billionaire Gautam Adani, the founder of the group, in addition to 7 other people, including Sajer Adani and Vineet S. Jain, who are senior executives at Adani Green Energy Limited.
The list indicates that the alleged bribes were part of a plan to win solar energy supply contracts, and these plans were concealed while seeking financing from American investors.
The defendants also face charges of providing misleading data to American investors and international financial institutions to obtain financing of more than $3 billion. The charges referred to coordinated efforts to conceal bribes through various means, including falsifying internal reports and analyses.
Adani Group denied these allegations, describing them as baseless and affirming its commitment to laws and standards. According to the group’s chief financial officer, Jogeshinder Singh, these accusations focus only on one contract that constitutes about 10% of Adani Green’s business.
Singh stated in a tweet on the X platform that “the group’s 11 companies listed on the stock exchange have not been accused of any violations.” He stressed that the group will respond legally after fully reviewing the case.
Financial and economic damages
The accusations had an immediate impact on the group at various levels, as:
- Adani Group shares lost $27 billion of their market value in one day, which is equivalent to about 19% of the group’s total value estimated at $143 billion, followed by some recovery supported by the improved performance of its cement companies.
- The group canceled a $600 million bond issue that was supposed to help finance its future projects.
- Meanwhile, according to Bloomberg, the Kenyan government announced the cancellation of two deals with the Adani Group worth more than $2.5 billion.
- Some banks are considering suspending the issuance of new debt to the group.
- The Capital Markets Regulatory Authority of India is currently examining whether the group has violated the rules for disclosing sensitive information that may affect the market.
Reuters said that Gautam Adani denied all the accusations and described them as “baseless.” The group confirmed that it will use all legal means to defend itself, noting that the accusations only covered one decade of its huge total work.
The current case is not the first in which the Adani Group has faced accusations that threaten its standing. Last year, the group faced a report from Hindenburg Research alleging its misuse of offshore tax havens.
Although the group denied these allegations, the report caused a significant decline in its shares at the time.
Background about the group
The Adani Group is an Indian multinational conglomerate, headquartered in Ahmedabad, Gujarat (western India). It was founded in 1988 by Gautam Adani, a prominent businessman and one of the richest people in India and the world.
Sectors in which Adani Group operates:
- Infrastructure: development and operation of ports and airports.
- Energy: Electricity generation, including renewable energy (solar and wind energy) and conventional energy.
- Mining: Coal and mineral mining.
- Agriculture: agricultural commodity trading and warehousing management.
- Logistics services: sea and land transportation and warehousing.
- Gas and petrochemicals: exploration, production and distribution of natural gas.
