Adani Stocks Plunge 20% Amid $250M Bribery Allegations

Adani Group stocks experienced a sharp crash on Thursday, plummeting by up to 20% in the aftermath of charges filed in the United States against the group’s founder, Gautam Adani, and seven others. 

The charges, which allege a $250 million bribery scheme to secure Indian solar energy contracts, sent shockwaves through both domestic and international markets. Adani Enterprises, Adani Green Energy, and Adani Energy Solutions were among the hardest hit, with their shares hitting lower circuits during early trading on Thursday, 21 November 2024.

Adani Enterprises fell around 10% to ₹2,539.35, while Adani Green Energy dropped 17% to ₹1,172.50. Adani Energy Solutions recorded a 20% decline, reaching ₹697.25 and hitting its 52-week low. The slump extended beyond equities, as the group’s dollar-denominated bonds also suffered significant declines, with Adani Green Energy’s March 2024 bonds falling by 15 cents. 

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Along with this, the market capitalization of Adani stocks fell approximately to ₹2 lakh crore. This marks the worst trading day for the corporation since the Hindenburg report in 2023. 

Gautam Adani Accused of a Multibillion-Dollar Bribery Scheme

U.S. prosecutors have accused Gautam Adani and seven others of orchestrating a multibillion-dollar bribery and fraud scheme between 2020 and 2024, according to Reuters. The indictment, unsealed by the United States District Court for the Eastern District of New York, has alleged that the group paid over $250 million in bribes to Indian government officials to secure lucrative solar energy contracts projected to generate $2 billion in post-tax profits over 20 years.

The charges include securities fraud, wire fraud, and violations of the Foreign Corrupt Practices Act (FCPA). According to prosecutors, the alleged scheme involved falsifying records, misleading U.S. investors, and obstructing investigations. The group reportedly provided false assurances about its anti-corruption policies to raise over $3 billion through loans and bond offerings. Evidence cited includes electronic communications, spreadsheets tracking bribes, and photographic documentation.

The allegations also implicate senior Adani executives, including Sagar Adani and Vneet S. Jaain, who are accused of documenting bribe payments. The charges claim that Gautam Adani personally met with Indian officials to further the bribery plot.

Additionally, the U.S. Securities and Exchange Commission (SEC) has filed a civil lawsuit alleging that Adani Green Energy misled investors while raising $175 million. Four other individuals, including former executives and employees of associated entities, face charges of obstructing justice by deleting electronic evidence and providing false statements during investigations.

This scandal comes at a time when the Adani Group has been focusing on reducing its debt and stabilizing its financial position following the Hindenburg Research report in early 2023. That report wiped out over ₹12 lakh crore in combined market value from Adani’s stocks and bonds, leading to intense scrutiny of its operations.

In Conclusion

The recent allegations have once again cast a shadow over the Adani Group, raising questions about its governance and compliance practices. The sharp decline in stock prices and bond values reflects eroded investor confidence. With ongoing investigations and mounting legal challenges, the group’s efforts to regain stability may face significant hurdles. While the company has been proactive in addressing debt concerns, the outcome of this case will be crucial in determining its long-term reputation and financial health.