Clarification on the bribery allegations led to a rise in Adani Group shares.
Adani Green Energy Ltd said the group’s founding chairman Gautam Adani, his nephew Sagar Adani, and senior executive Vneet Jaain have not been charged with violating the US Foreign Corrupt Practices Act (FCPA) over bribery, as well as a civil complaint filed by the US Securities and Exchange Commission. and the Exchange Commission (SEC) based on this. However, he was indicted on three counts in the criminal indictment of securities fraud conspiracy, wire fraud conspiracy and securities fraud, the company said in a statement Adani Group issued on Wednesday.
The corruption issue only applies to Azure Power and CDPQ executives, according to the Adani Group.
Agency Market capitalization
The group said $55 billion had been wiped from the market cap of its listed units after the US indictment was made public. Following the clarification, some stocks surged as much as 20%, adding to Adani Group’s market capitalization by Rs 1.22 lakh crore on Wednesday. “Adani Group is India’s largest infrastructure player with large operations in the global energy and logistics space … expanding its operations in international markets and directly competing with several US and Chinese entities in Africa, Bangladesh, Sri Lanka, Israel, and Australia,” said.
Foreign Impact
After the news became public on November 21, the Kenyan government ordered the cancellation of a 30-year, $736 million agreement with Adani Energy Solutions to build an electricity transmission line in a public-private partnership with Kenya Electrical Transmission Co. It also directed the cancellation of the procurement process to expand the country’s main airport which the government has been considering the proposal by the Adani Group.
French energy major TotalEnergies, which owns 19.75% of Adani Green Energy Ltd (AGEL) and 37.4% of Adani Total Gas, said it is pausing new financial contributions to Adani-related ventures. AGEL rejected claims that TotalEnergies’ decision would affect its growth plans and said there were no financial commitments left in discussions with the French company.
“DFC reviewed the port development loan of $550 million to the Adani-led consortium to develop CWIT, a container terminal at Colombo Port. .
Bangladesh’s interim government has set up a review committee to investigate energy deals signed by the previous regime, including a deal involving Adani Power’s Godda coal plant, Reuters news agency reported this week.
Jefferies, GQG
Adani Group said international investment bank Jefferies Group, which had been a key backer, was reconsidering its relationship with the group following the allegations. “This reassessment reflects concerns about reputational risk and compliance issues,” he said.
Jefferies has been the banker for quality institutional placements (QIPs) by the group this year—Adani Green Energy ($1 billion) and Adani Enterprises ($500 million). It is the only US banker involved in the exercise. Jefferies was also a banker when GQG Partners first invested in the group’s company in February 2023, shortly after the Hindenburg Research report was published, causing the Adani Group’s shares to crash.
US-based GQG Partners, which has more than $8 billion in investments in Adani Group companies, is facing a financial setback following the US indictment.
“The shares in GQG Partners have declined significantly, and while the company has publicly announced its confidence in the sustainability of the Adani Group, it may be forced to reconsider its investment in Adani in the light of legal developments,” said the Adani Group.
After the clarification was issued, Adani Power and Adani Total Gas ended 20% higher. Adani Enterprises, the flagship entity, closed 11.56% higher at Rs 2,398.35. Adani Green and Adani Energy Solutions finished 10% higher and Adani Ports and SEZ rose 6.29%.
Rohatgi, Jethmalani
Former attorney general and senior counsel Mukul Rohatgi insisted on clarification on bribery allegations.
“Scoring one and scoring five is more important than anything else, but neither is Adani and his nephew,” Rohatgi told reporters in New Delhi. “Count one against the other minus two Adanis.”
He said he was speaking on the matter in his individual capacity, adding that the charges did not mention any person or entity that had been bribed, which should have been in the charge sheet.
Counting one of the indictments, which refers to allegations of corruption and bribery, only involves Ranjit Gupta, Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra, and Rupesh Agarwal from Azure Power and CDPQ (Caisse de depot et placement du Quebec-a Canadian institution). investors and Azure’s largest shareholder).
Separately, senior lawyer Mahesh Jethmalani on Wednesday said that the US indictment against Gautam Adani has only allegations and the allegations have not been proved. He also attacked the Congress party, asking it to produce evidence before holding a press conference to launch its attack on Adani.
