The Adani Group, an Indian conglomerate, has reported a significant loss of nearly $55 billion in market capitalization following the recent US charges against its founder and other officials for fraud. The company strongly denies these allegations.
The Adani Group in India reported a staggering loss of nearly $55 billion in market value following accusations from US prosecutors of fraud and bribery. The charges, filed on November 20, 2024, accuse the conglomerate’s founder, Gautam Adani, and several of his associates of misleading investors and offering bribes to Indian government officials to secure lucrative contracts.
The indictment, brought by the US Department of Justice, alleges that Adani and his team orchestrated a scheme to offer and promise bribes to government officials in exchange for government contracts. Gautam Adani, 62, is reportedly linked to a $250 million bribery plan. The Adani Group has firmly denied these allegations, calling them “baseless” and dismissing claims of bribery. The company emphasized that the charges are related only to securities fraud and wire fraud conspiracy, not bribery.
The US charges triggered a sharp drop in Adani Group’s stock, causing a heavy sell-off in Mumbai’s stock market. Since the indictment, Adani Group’s total market capitalization across its 11 listed companies has plummeted by almost $55 billion. While stocks of some Adani subsidiaries showed signs of recovery on November 27, the group’s flagship company has suffered a loss of over 20% of its value.
International Rippel Effect
The charges have also caused international ripple effects. In Kenya, President William Ruto announced that the Adani Group would no longer be involved in key projects, including an expansion of the country’s electricity grid and its main airport. Similarly, Sri Lanka has begun an investigation into the group’s local investments, including a $442 million wind power project and a deep-sea port terminal in Colombo.
Adani, once the world’s second-richest person, has faced allegations of benefiting from his close ties with Indian Prime Minister Narendra Modi. The group’s rapid expansion in sectors like coal, airports, and media has raised concerns about its financial stability. Last year, a report by short-seller Hindenburg Research accused the company of fraud, wiping out $150 billion in market value.
Despite the ongoing challenges, Adani has vowed to fight the charges legally and continue the group’s operations. The Indian opposition, including Congress leader Rahul Gandhi, has called for a thorough investigation into Adani’s alleged wrongdoing, while the ruling government has distanced itself from the controversy.
