Shares linked to Adani Group — led by Indian billionaire Gautam Adanikar — fell on Thursday after U.S. law enforcement agencies accused Adani and fellow executives of paying more than $250 million in bribes to Indian government officials. had been
Adani Enterprises, the group’s flagship company, fell more than 20 percent. Fellow group companies Adani Green Energy and Adani Ports fell 19% and 13% respectively.
Companies linked to Adani were also affected. GQG Partners, an Australian-listed investment firm and Adani Enterprises’ fourth-largest shareholder, fell nearly 20% on Thursday.
Indian markets also fell on Thursday. The NIFTY 50, which tracks the 50 largest companies on India’s national stock exchange, fell 0.7%. (Adani Enterprises and Adani Ports are part of NIFTY 50.)
The share slide has wiped about $15 billion from Adani’s net worth, according to a Bloomberg estimate. The decline has wiped out all gains in the billionaire’s wealth this year.
In a statement issued on Thursday, the Adani Group called the US allegations “baseless” and said it would “pursue all possible legal avenues.”
“We are a law-abiding organization that fully complies with all laws,” a spokesperson said in a statement.
Adani is in for a wild ride.
Adani’s shares have been on a wild ride since January 2023, when US short-selling firm Hindenburg Research accused the Adani group of engaging in stock manipulation and accounting fraud.
According to Bloomberg, share prices fell after the report was released, shedding about $153 billion in market value.
The Adani Group denied Hindenburg’s allegations, calling them an attempt to tarnish the company’s reputation and a “calculated attack on India”.
Investors soon moved on from the controversy, and Adani’s shares recovered during 2023 and 2024. Shares of Adani Enterprises rose to around 3,600 Indian rupees ($42.61) in June 2024, up from a low of 1,315 rupees ($15.50) in February 2023.
In July, Hindenburg Research admitted it made just $4 million from its bet against Adani Group.
But short sellers have kept pressure on the Adani group. In September, Hindenburg alleged that Swiss authorities had frozen more than $310 million in several Swiss bank accounts in an investigation into alleged money laundering and securities fraud. Adani Group has also denied these allegations.
How important is Gautam Adani in India?
Adani Group Chairman Gautam Adani is one of India’s most powerful businessmen. The Adani Group’s businesses span a number of sectors including aviation, marine, railways and energy.
Investors have linked Adani’s success to the broader Indian economy, as the Indian government, led by Prime Minister Narendra Modi, seeks to build the country’s infrastructure.
Adani is seen as a close ally of Indian Prime Minister Narendra Modi, dating back to the early 2000s, when Modi was chief minister of Gujarat state. Adani Enterprises shares fell 19 percent in early June after India’s general election, when Modi’s Bharatiya Janata Party failed to win an outright majority in the country’s legislature.
Adani Group is involved in several major projects in India and abroad. The party won a contract to redevelop the Dharavi slum in Mumbai in 2022, displacing 700,000 people from the slums.
Adani is also bidding for green energy projects in Galifo, a project to build a new city on the Himalayan nation of Bhutan’s border with India.
And in November, shortly after Donald Trump was elected to the US presidency, Adani pledged to invest $10 billion in US energy projects.
What are the US charges against Adani?
On Wednesday, US prosecutors charged Adani, his nephew Sagar Adani, and six other executives in a bribery scheme involving Adani’s subsidiaries Adani Green Energy and Azure Power.
Deputy Assistant Attorney General Lisa H. Miller said in a statement, “This indictment alleges that Indian government officials paid more than $250 million in bribes, lied to investors and banks to raise billions of dollars, and obstructed justice.” Alleged obstruction.”
U.S. law enforcement officials have estimated that executives raised more than $2 billion in loans and bond offerings under false pretenses.
On Thursday, the Indian National Congress Party, the country’s largest opposition party, called for an investigation into Adani’s business dealings, with party leader Rahul Gandhi calling for the billionaire’s arrest.
