Stocks of the Adani Group witnessed a significant decline on Thursday. Billionaire Gautam Adani and seven others faced charges in the United States related to a multibillion-dollar bribery and fraud scheme. This has had a major impact on the group's share prices.
Impact on Adani Group Stocks
Shares of Adani Energy Solutions were the hardest hit, crashing by 20%. Adani Green shares also dropped around 18%, while Adani Total Gas and Adani Power fell between 13% and 14%. On the other hand, Adani Enterprises, Ambuja Cements, ACC, and Adani Ports were locked in 10% lower circuit limits. NDTV shares were down 11%, Adani Wilmar fell 8%, and the newly-acquired Sanghi Industries dropped 6%.The group's decision to scrap a $600 million bond and the plunge in its existing US-currency notes in Asian trading further highlight the severity of the situation. Adani Green Energy UP dollar notes sold in March declined by 15 cents, a record, and other notes from group companies dropped the most since the Hindenburg Research report in 2023.Details of the Bribery Case
According to the case by the US Securities and Exchange Commission, Gautam Adani has been charged with defrauding American investors and bribing officials. He, his nephew Sagar Adani (30), executives of Adani Green Energy, and Cyril Cabanes (an executive of Azure Power Global Ltd) were charged with conspiracy to commit securities and wire fraud, as well as substantive securities fraud.The indictment alleges that they paid approximately $265 million in bribes and expected these contracts to generate $2 billion in profit over two decades. Some involved in the scheme used code names like "Numero uno" and "the big man" to refer to Gautam Adani. They also hid the bribes from lenders and investors to secure over $3 billion in loans and bonds for Adani Green Energy.This case falls under the Foreign Corrupt Practices Act, a US law against bribery in foreign business dealings. Deputy Assistant Attorney General Lisa H Miller said, "This indictment alleges schemes to pay over USD 250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice."Adani's Global Position
Gautam Adani, 62, holds the 22nd richest person globally position according to Forbes magazine, with an estimated net worth of $69.8 billion. However, this is the second major setback for him after the Hindenburg Research case in 2023, where the US-based short-seller accused the Adani Group of improperly using offshore tax havens. The Adani Group has denied these allegations, but the recent US charges have again triggered a significant drop in its stocks, wiping out approximately $150 billion.It is important to note that the US government has not yet revealed full details about the specific allegations against Adani and the other individuals. The Adani Group did not immediately respond to requests for comment when the charges were announced early Thursday morning.