Market woes continued for Gautam Adani back home in India as the country’s markets opened to punish the Adani Group. In Thursday morning trade, Adani Green Energy made a freefall, shedding at least 18 per cent from Wednesday’s close of Rs 1412.70 a piece in the National Stock Exchange.
Adani Power stock fell by almost 14 per cent and Adani Ports slipped 15 per cent in early trade, hours after the American market watchdog SEC announced the indictment of key Adani Group officials by the US in a multibillion-dollar bribery and fraud scheme.
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The SEC named Adani Group chairman Gautam Adani, along with his nephew Sagar Adani, the executive director at Adani Green Energy, and Vneet Jaain, managing director of the Adani Green Energy board. Jaain was also the company’s chief executive from 2020 to 2023.
Indian benchmark indices Sensex and Nifty tumbled in early trade as Adani group stocks fell in value en masse. Sensex tumbled more than 468 points, and the NSE Nifty shed at least 179 points in the morning alone. Adani Ports is part of the Sensex, comprising 30 stocks.
Adani Enterprises and Adani Energy Solutions also followed suit, adding to the chairman’s woes. Before 10.30am IST, Adani Power hit a daily low of Rs 432 (vs previous close of Rs 524.10), Adani Green Energy touched Rs 1136.55 (vs previous close of Rs 1412.70), Adani Ports crashed to Rs 1031.70 (vs previous close of Rs 1289.65), Adani Enterprises dipped to Rs 2172.50 (vs previous close of Rs 2821.50), and Adani Energy Solutions fell as low as 697.25 (vs previous close of Rs 871.55).
Adani’s fall from grace
This has been one of the biggest falls from grace and in markets for Adani Group since the release of last year’s Hindenburg Research report.
The indictment against Adani and others was unsealed on Wednesday in the US District Court in New York’s Eastern District. The US has charged Adani and the others with allegedly tricking investors into securing a significant solar energy project from Adani Green Energy by bribing Indian officials.
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The nine members who were charged, including the two Adanis, allegedly agreed to pay about USD 265 million in bribes to government officials in India to bag contracts. The bribery was kept under wraps, tantamount to duping Wall Street investors who invested several billion dollars into the project over the past five years. The prosecution also charged former Adani Green Energy CEO Vneet Jaain and said that the accused raised a little over USD 3 billion in loans and bonds through the scheme.
On Wednesday night, the US Securities and Exchange Commission (SEC) announced that Gautam Adani and two co-defendants violated antifraud provisions of US securities laws. The regulator also promised penalties and other sanctions in the official statement.
“The complaint seeks permanent injunctions, civil penalties, and officer and director bars. The SEC’s complaint against Cabanes charges him with violating the FCPA and seeks a permanent injunction, a civil penalty, and an officer and director bar,” read the statement.
The SEC also thanked the US Attorney’s Office, the Fraud Section of the US Department of Justice, and the FBI in the indictment announcement.
Moody’s rate the bribery charges against key Adani Group executives as ‘Credit Negative’
Global credit assessment agency, Moody’s Ratings, on Thursday announced that the bribery and fraud charges against Indian industrialist Gautam Adani as a “credit negative” for the group’s companies.
“The indictment of Adani Group's chairman and other senior officials on bribery charges is credit negative for the group’s companies. Our main focus when assessing Adani Group is on the ability of the group’s companies to access capital to meet their liquidity requirements and on its governance practices,” read the Moody's statement.