The logo on top of the Adani Group headquarters in Ahmedabad, India, Wednesday, February 1, 2023. Stock issuance.
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Adani Group is facing fallout as investors and partners reconsider their relationship with the Indian conglomerate after U.S. authorities accused it of bribery and fraud.
Projects and investments related to Indian conglomerates’ global operations have come into focus. U.S. indictment of its billionaire founder last Thursday on the bribery and fraud charges.
Leonard Law, senior credit analyst at Lucro Analytics, told CNBC: “The U.S. indictment may limit the group’s access to new financing in the short term, especially in offshore capital markets.” Denies any wrongdoing.
The accusations are “more serious” than those in a 2023 report by short-seller Hindenburg Research, and legal proceedings could be protracted, he added.
Fitch Ratings Already put a few The dollar bonds issued by Adani Group of Companies have been placed on negative rating watch, which means that the ratings of these bonds may be downgraded.
The action reflects higher corporate governance risks and “potential contagion risks” that could impact access to financing and liquidity.
Last week’s explosive indictment triggered a sell-off in the group’s shares, Kenyan President William Ruto Reuters reported that airport and power deals worth about $2.5 billion with the group were canceled.
French energy giant TotalEnergies, New investment suspended on Monday has ties to the Adani Group and claims it was not informed of an investigation into alleged corruption schemes.
“TotalEnergies will not make any new financial contributions as part of its investment in Adani Group companies until the allegations against individuals in the Adani Group and their consequences are clarified,” the French company said.
The French oil major owns 19.75% of Adani Green Energy and holds a 50% stake in the joint venture with Adani Green, whose shares fell 2.4% on Monday.
USA International Development Finance Corporation stated It will review its previous agreements Loans of US$553 millionoa Sri Lankan port development project backed by Adani Group.
“DFC is aware of the recent allegations relating to Adani and is actively assessing their impact in light of recent statements from the Department of Justice,” an official at the development agency said in a statement.
Subpoenas, more investigations, calls for arrests
Federal prosecutors in New York last week indicted Adani and seven others on charges that they paid approximately $265 million in bribes to Indian government officials to secure solar contracts that could generate more than $2 billion in profits over 20 years.
The charges also include misleading U.S. and international investors about compliance with anti-bribery and anti-corruption practices while raising more than $3 billion to fund these energy contracts.
Adani Group chairman Gautam Adani and his nephew Sagar Adani have been indicted in an escalating legal battle stateside. It is said Subpoenaed by the U.S. Securities and Exchange Commission on suspicion of bribery.
Representatives for Adani Group did not immediately respond to CNBC’s request for comment on Tuesday. The company had earlier said the charges from U.S. authorities were “baseless” and will seek “all possible legal recourse.”
Meanwhile, Indian opposition leader Rahul Gandhi has Call for Adani’s arrestAccording to domestic media reports.
The Securities Regulatory Authority of India is It is said Investigating whether Adani Group failed to disclose information related to a U.S. Department of Justice investigation into bribery allegations.
The proceedings of the country’s parliament are Suspended on Monday due to disruption Lawmakers have called for a discussion on corruption allegations against the Adani family.
A new petition has also been filed File a case in the Supreme Court of India Seeking investigation into bribery allegations by Indian authorities, According to local media reports.
Adani Group spent much of last year trying to Beyond scathing reporting Short-seller Hindenburg Research accuses it of financial misconduct and stock manipulation.
Shares of Adani Enterprises, the Indian group’s flagship company, have fallen more than 20% as of Tuesday since the notice of indictment was issued, while Adani Green Energy, the company at the center of the storm, has fallen more than 35%.
Since then, Adani Power shares have fallen about 15%, while Adani Ports and SEZ shares have fallen 11%.
