New Delhi: India’s Adani Group conglomerate says it has lost almost US$55bil in a stock market rout since US prosecutors last week accused its founder and other officials of fraud.
The Nov 20 bombshell indictment in New York accused billionaire industrialist founder Gautam Adani and multiple subordinates of deliberately misleading international investors as part of a bribery scheme.
The indictment said they had “devised a scheme to offer, authorise, make and promise to make bribes payments to Indian government officials”.
The firm, which denies the charges, said in a statement yesterday: “Since the intimation of the US Department of Justice indictment, the group has suffered a loss of near US$55bil in its market capitalisation across its 11 listed companies.”
Gautam Adani, 62, is suspected of having participated in the US$250mil scheme in bribes to secure lucrative government contracts.
Adani Group issued a stiff denial, describing the charges as “baseless”, but it triggered a heavy sell-off of Adani stocks in Mumbai last week, with multiple trading halts.
Stocks in Adani Enterprises rose 1.8% yesterday, but the group’s key firm has lost more than 20% of its market capitalisation since the indictment was released.
A statement yesterday said Adani officials are “only charged” with securities fraud, wire fraud conspiracy and securities fraud. It denies all the charges.
It said it was “incorrect” to say that either Gautam Adani or his nephew Sagar Adani had been charged with bribery or corruption.
Adani is a close ally of Hindu nationalist Prime Minister Narendra Modi and was at one point the world’s second-richest man, and critics have long accused him of improperly benefitting from their relationship.
The group said the action had led to “significant repercussions”, including “international project cancellations, financial market impact and sudden examination from strategic partners, investors and the public”.
That included in Kenya, where President William Ruto said the Adani Group would no longer be involved in plans to expand the East African country’s electricity network and its main airport.
The Adani Group was to invest US$1.85bil in Jomo Kenyatta Airport and US$736mil in state-owned utility Ketraco.
Sri Lanka has opened an investigation into the local investments of the group, including a US$442mil wind power deal and an Adani-led deepsea port terminal in Colombo, which is estimated to cost more than US$700mil.
With a business empire spanning coal, airports, cement and media, Adani Group has weathered previous corporate fraud allegations and suffered a similar stock rout last year.
The conglomerate saw US$150bil wiped from its market value in 2023 after a report by short-seller Hindenburg Research accused it of “brazen” corporate fraud. — AFP
