Stocks of Adani Group companies extended losses, falling over 20% to an intraday low on Thursday, November 21, following alleged charges against Gautam Adani, the chairman of India’s Adani Group, and seven others in a multibillion-dollar bribery and fraud scheme in the U.S.
Adani Group Stock Performance
| Name of Stock | Stock Reaction Intra-day |
| Adani Enterprises | -23% |
| Adani Ports and SEZ | -22.8% |
| Adani Green Energy | -20% |
| Adani Power | -17.5% |
| Adani Energy Solution | -20% |
| Adani Total Gas | -18.77% |
| Adani Wilmar | -10.1% |
| Ambuja Cement | -17.48% |
Adani Group Faces Serious Allegations
According to reports by news agencies including Reuters and Bloomberg, prosecutors in the United States revealed on Wednesday that the charges involve the bribing of Indian officials to secure solar energy contracts.
The charges were unveiled by US prosecutors, who accuse the Adani Group of engaging in a large-scale bribery operation. The allegations suggest that Adani and other executives paid bribes to Indian officials in exchange for favorable solar energy contracts, forming part of a broader multi-billion-dollar fraud scheme.
Details on US indictment
Gautam Adani, the billionaire chairman of the Adani Group, has been indicted by the US Securities and Exchange Commission (SEC) on charges of defrauding American investors and allegedly bribing foreign officials.
The indictment, which includes Gautam Adani, his nephew Sagar Adani, 30, and several senior executives of Adani Green Energy, along with Cyril Cabanes, an executive at Azure Power Global Ltd, details their involvement in a large-scale conspiracy to defraud investors and global financial institutions.
The Alleged Fraudulent Scheme
According to the SEC’s case, Adani and the others are accused of conspiring to commit securities and wire fraud, as well as engaging in substantial securities fraud.
The charges stem from their roles in orchestrating a multi-billion-dollar scheme designed to secure funds from US investors and international financial institutions using false and misleading statements.
The defendants allegedly funneled money through bribes and concealed them from investors and lenders.
Bribe Payments and Hidden Profits
The indictment further claims that Adani and his associates paid approximately $265 million in bribes. These payments were reportedly made to secure contracts that were expected to yield $2 billion in profits over the span of two decades.
The charges also allege that those involved used code names, such as “Numero uno” and “the big man,” to refer to Gautam Adani during the dealings.
Concealment of Bribes and Loans
Prosecutors assert that Adani, his nephew Sagar Adani, and another executive, Vneet Jaain, hid these bribe payments from lenders and investors to secure over $3 billion in loans and bonds for Adani Green Energy.
The indictment highlights the methods used by the accused to cover up the illicit transactions and deceive investors to obtain significant financing.
Foreign Corrupt Practices Act Violations
The charges are brought under the Foreign Corrupt Practices Act (FCPA), a US law that targets bribery in foreign business dealings. The FCPA aims to prevent US companies and individuals from participating in corrupt practices abroad, and violations of the act carry serious legal consequences, including substantial fines and penalties.
GQG Partners’ Statement on Legal Proceedings
In its statement, GQG Partners, a prominent investment firm, confirmed it is monitoring the situation following the charges against the Adani Group. GQG noted it is closely reviewing the latest developments and is evaluating whether any action is necessary in relation to its portfolio holdings.
“Our team is reviewing the emerging details and determining what, if any, actions for our portfolios are appropriate,” GQG stated.
Portfolio Strategy and Diversification
GQG highlighted its approach to diversified investment, clarifying that over 90% of its clients’ assets are currently invested in entities unrelated to the Adani Group. This aligns with GQG’s portfolio construction guidelines, which aim to maintain balanced and diversified investments.
GQG’s Current Stakes in Adani Group Companies
As of the quarter ending on September 30, 2024, GQG held stakes across six Adani Group companies, with holdings ranging between 1.5% and 2%. The specifics of GQG’s stakes are as follows:
| Name of Stock | GQG’s Partners Holding |
| Ambuja Cements | 2.05% |
| Adani Energy Solutions | 1.89% |
| Adani Power | 1.76% |
| Adani Green Energy | 1.62% |
| Adani Enterprises | 1.45% |
| Adani Ports | 1.46% |
(Disclaimer: Views, recommendations, and opinions expressed are personal and do not reflect the official position or policy of Financial Express.com. Readers are advised to consult qualified financial advisors before making any investment decisions. Reproducing this content without permission is prohibited.)
(With Reuters and Bloomberg Inputs)