Jamie Spencer
India’s Adani Group announced a staggering $55 billion loss in market capitalization across its 11 listed companies following a fraud indictment by U.S. prosecutors. The charges, unveiled on November 20, allege that founder Gautam Adani and senior officials engaged in a $250 million bribery scheme to secure government contracts.
The indictment accuses Adani officials of misleading international investors and authorizing bribes to Indian government officials. The conglomerate, however, has vehemently denied the allegations, calling them “baseless.”
Heavy Impact on Adani Stocks
The legal allegations triggered a major sell-off in Adani stocks last week. While shares in Adani Enterprises gained 1.8% on Wednesday, the group’s flagship firm has lost over 20% of its market value since the indictment.
Adani Group clarified in a statement that officials were charged only with securities fraud, wire fraud conspiracy, and securities fraud—not bribery or corruption. However, the group acknowledged the indictment has caused “significant repercussions,” affecting its international projects and partnerships.
International Fallout
The indictment has led to immediate consequences for Adani Group’s global ventures.
- Kenya: President William Ruto announced that Adani Group would no longer participate in projects to expand the country’s electricity grid or Jomo Kenyatta International Airport. These projects were initially valued at $1.85 billion and $736 million, respectively.
- Sri Lanka: Authorities opened investigations into Adani’s local investments, including a $442 million wind power deal and a $700 million deep-sea port terminal in Colombo.
History of Allegations
This is not the first time the Adani Group has faced corporate fraud allegations.
- 2023: Adani Group’s market value plummeted by $150 billion after short-seller Hindenburg Research accused it of “brazen” fraud. The conglomerate denied those claims, describing them as an attack aimed at benefiting short-sellers.
- 2022: Fitch subsidiary CreditSights raised concerns about the group being “deeply over-leveraged” due to its aggressive expansion into capital-intensive industries like coal, airports, cement, and media.
Gautam Adani’s Background
Born to a middle-class family in Gujarat, Adani dropped out of school at 16 and moved to Mumbai, initially working in the gem trade. He later ventured into exports, founding the Adani Group in 1988, which grew into a sprawling conglomerate.
Adani Group’s denial of the allegations and its efforts to stabilize investor confidence are being closely monitored as the company navigates this latest crisis. Meanwhile, global partners and governments are reassessing their associations with the conglomerate, further complicating its path forward.
