Impact of US bribery charges against Gautam Adani – Firstpost

Indian billionaire Gautam Adani’s business empire was rocked by US bribery charges on Thursday (November 21). The US indictment saw Adani’s net worth plummet, the company’s shares bleed and its contracts cancelled.

Adani’s losses come after the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) accused the Adani family and its partners of paying $265 million in bribes to Indian officials to secure lucrative solar energy contracts.

Adani Group rejected the US accusations, calling them “baseless”. Holding said, “The allegations against Adani Green’s executives by the US Department of Justice and the US Securities and Exchange Commission are baseless and rejected,” and added, “Every possible legal action will be taken.”

As the plot gathers momentum, we try to explain exactly what has happened so far, what Adani is accused of, how this affects its business empire, and what happens next.

USA’s accusation against Adani

The problem appeared on Thursday
Gautam AdaniThe billionaire chairman of Indian conglomerate Adani Group has been accused by the United States of paying more than $250 million to Indian government officials to secure lucrative solar energy contracts worth more than $2 billion over 20 years.

According to the indictment in the United States District Court for the Eastern District of New York, Adani is charged with foreign bribery, securities fraud, securities fraud conspiracy and wire fraud conspiracy.

“These crimes were allegedly committed by senior executives and directors in order to obtain and finance massive government energy supply contracts through corruption and fraud at the expense of U.S. investors,” Assistant U.S. Attorney Lisa Miller said in a statement.

It is important to note that Adani has only been charged so far. He has not been arrested, and if the case reaches this point, a trial seems a long way off.

Accordingly ReutersAdani could face decades in prison and a fine if tried and convicted, but the sentence will ultimately depend on the judge overseeing the case. According to the charges, the foreigner faces up to five years in prison for bribery and up to 20 years in prison for securities fraud, wire fraud, obstruction of justice and conspiracy.

Adani Speaks

The Indian billionaire, through his company, denied all accusations made by the USA, saying that legal action would be taken.

In its statement, Adani Group said, “As the US Department of Justice itself stated, the charges in the indictment are allegations and the defendants are presumed innocent until proven guilty. “Every possible legal remedy will be taken.”

Adani shares are on the decline

As news spread about US accusations against Adani, his company’s shares started falling on the Indian stock market. On Thursday, November 21,
Shares of Adani Group companies dropped to 23 percent. Adani Group companies lost a total of Rs 2.22 lakh crore in market capitalization on Thursday, data shows.

In sales, Adani Green Energy lost 18.80 percent, Adani Energy Solutions lost 20 percent, Adani Enterprises lost 22.61 percent, Adani Power lost 9.15 percent and Adani Ports lost 13.53 percent.

Some analysts noted that Thursday (Nov. 21) was the worst trading day since the trade.
Hindenburg Research report Adani group had lost market capitalization of around Rs 1 lakh crore in January 2023 following the release of the Hindenburg report.

And this decline continued even as markets reopened on Friday. Shares of eight of the 10 listed Adani firms were trading lower on Friday morning. Adani Green Energy fell 10.95 percent and Adani Energy Solutions fell 8.57 percent.

PTI news agency reported that the shares of Adani Enterprises, the flagship of the group, are 6.98 percent, Adani Power is 6.38 percent, Adani Total Gas is 6.11 percent, Adani Ports is 5.31 percent and Adani’s shares are 6.98 percent. reported that it decreased by 6.98 percent. Wilmar fell 5.17 percent.

$10.5 billion drop in net worth

US allegations against Gautam Adani also showed a massive drop in the billionaire’s net worth by $10.5 billion or approximately 88.726 billion rupees on Thursday.

Adani, India’s second richest man, currently has a net worth of $59.3 billion, according to the Forbes Realtime Billionaire Index.

Forbes also reported that Gautam Adani’s brother Vinod Adani suffered a significant loss of $4.7 billion and his net worth dropped to $15.5 billion.

Ratings lowered

The day after the allegations, S&P Global Ratings also downgraded the outlook for three entities of Adani Group from ‘stable’ to ‘negative’. S&P revised its outlook on a unit of Adani Green Energy linked to the allegations. He also downgraded Adani Electricity and Adani Ports, adding that it could go down further if the allegations are confirmed.

“In addition to regular refinancing, the group will need regular access to both equity and debt markets, given its major growth plans. We believe local banks as well as some international banks and bond market investors view Adani companies as a group and may set group limits on their exposure,” S&P said in a note.

Kenya withdraws Adani deals

Gautam Adani’s losses continue to mount as Kenyan President William Ruto cancels agreements with the Adani Group. He said Adani Group would no longer be involved in plans to expand Kenya’s power grid and its main airport, Jomo Kenyatta International.

Adani Group would invest $1.85 billion in Jomo Kenyatta airport and $736 million in state-owned utility KETRACO.

“I have directed the agencies under the ministry of transport and the ministry of energy and petroleum to immediately cancel the ongoing procurement,” Ruto said, attributing the decision to “new information provided by research institutions and partner countries”.

Adani cancels $600 million bond issue

Amid bribery accusations in the US, Adani Green Energy Ltd has announced that it will not proceed with its proposed $600 million dollar bond issue. The company announced its decision in a regulatory filing, citing the indictment as the reason for its subsidiaries’ plans to delay the bond offering.

“The United States Department of Justice and the United States Securities and Exchange Commission filed criminal complaints and civil complaints, respectively, with our Board of Directors members Gautam Adani and the U.S. District Court for the Eastern District of New York. Sagar Adani. The United States Department of Justice included our Board member Vneet Jaain in such a criminal complaint. The statement stated that in light of these developments, our subsidiaries have decided not to proceed with the currently proposed offering of US dollar-denominated bonds.

Gautam Adani is facing challenges; The allegations have shaken investors’ confidence and are affecting its business. In this episode we will see what happens next.

With input from agencies