Signage of Adani Group at Adani Defense and Aerospace booth during Aero India 2023 at Yelahanka Air Force Station in Bengaluru, India, Monday, February 13, 2023.
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India’s Adani Group saw its companies’ shares tumble on Thursday after its billionaire chairman Gautam Adani was indicted in a New York federal court on charges of involvement in bribery and fraud operations.
The 62-year-old billionaire and seven other defendants are accused of paying more than $250 million in bribes to Indian government officials to secure solar power contracts that could generate more than $2 billion in revenue.
The flagship company of the Indian group Adani Enterprises fell 10%, while the company in the eye of the storm Adani Green Energy grew 17.28%. Adani Energy is down 20%.
Adani Power lost 13.81%, Adani Port’s share price fell 10%, while the group’s retail arm Adani Wilmar shed 7.87%.
benchmark NSE Nifty 50 The index fell 0.63% in the first hour of trading.
Adani, along with two executives from Adani Green Energy Limited – his nephews Sagar Adani and Vneet Jaain – are accused of lying to US and international investors about the company’s adherence to antibribery and anticorruption standards while raising more than $3 billion to finance energy projects.
Adani Green Energy has canceled plans to raise funds through US dollar-denominated bonds, Reuters reported.
“These are serious allegations,” said David Riedel, president and founder of Riedel Research Group. “They will definitely be cut off from the US market,” he said, adding that Adani would have to find domestic sources of funding.
Riedel also expects more pain in Adani-related stocks: “They will probably recoup everything they got in the last year or so.”
The five-count indictment in US District Court in Brooklyn also charges Ranjit Gupta and Rupesh Agarwal, former executives of the renewable energy company Azure Power Global, along with three former employees of the Canadian investment institution Caisse de Depot et Placement du Quebec – Saurabh Agarwal, Cyril Cabanes, and Deepak Malhotra.
The CDPQ said it was aware of the allegations made. “These employees are all terminated by 2023 and CDPQ is cooperating with US authorities,” the investor said in an email.
This is after the conglomerate spent much of the last year trying to move beyond the allegations of accounting fraud and “brazen stock manipulation” made by the short-selling company Hindenburg Research.
“Since publishing the January 2023 report that identified Adani as the largest corporate entity in history, we have never wavered in our opinion, nor has Adani disputed our findings,” Hindenburg said in a statement to CNBC on Thursday.
The conglomerate denied the claims, adding that it “always complies with all laws.”
The charges do not change the “strong fundamentals” of the Indian market or the country’s growth trajectory, Raymond James head of advisory solutions and market strategy, Matt Orton, said.
“Once the dust settles, there will be better opportunities for long-term investors in India,” he said.
—CNBC’s Dan Mangan contributed to this report.
