Adani Ports shares sink 20% as Gautam Adani faces US bribery charges

Shares of Adani Ports & Special Economic Zone plummeted 20% to Rs 993.85 on Thursday after U.S. prosecutors in New York indicted Gautam Adani, his nephew Sagar Adani, and six others on allegations of bribery and fraud. The indictment accuses the group of offering $265 million in bribes to Indian officials to secure solar contracts, potentially yielding $2 billion in profits over 20 years.

The fallout extended to the bond market, with Adani companies’ dollar bonds witnessing steep declines. Adani Ports' bonds maturing in August 2027 dropped over five cents on the dollar, according to LSEG data.

Adani Electricity Mumbai debt maturing in February 2030 fell nearly eight cents and dollar bonds issued by Adani Transmission also notched falls larger than five cents to trade just above 80 cents.


Moody's Ratings on Thursday said that the news is credit negative for Adani Group 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," Moody's said.

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As per the case by the US Securities and Exchange Commission, Gautam Adani has been charged with allegedly "defrauding American investors and bribing officials". Adani, 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, for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions through false and misleading statements".

The indictment says Adani and the others paid approximately $265 million in bribes. They expected these contracts to generate $2 billion in profit over two decades. Prosecutors claim some involved in the scheme used code names like “Numero uno” and “the big man” to refer to Gautam Adani.

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The indictment also alleges Adani, his nephew Sagar Adani, and another executive, Vneet Jaain, hid bribes from lenders and investors to secure over $3 billion in loans and bonds for Adani Green Energy.

The charges fall under the Foreign Corrupt Practices Act, a US law against bribery in foreign business dealings.

"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," said Deputy Assistant Attorney General Lisa H Miller.

"These offences were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of US investors," she added.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)