Adani Group Bonds Plunge As Gautam Adani Faces US Indictment For Bribery, Fraud

Dollar bond prices of companies within the Adani Group fell sharply during early Asian trading on Thursday, 21 November, after the conglomerate's billionaire chairman, Gautam Adani, was indicted in New York on charges of bribery and fraud, according to Reuters.

Debt issued by Adani Port and Special Economic Zone, maturing in August 2027, dropped by over five cents on the dollar, as indicated by LSEG data. Bonds of Adani Electricity Mumbai, due in February 2030, fell by nearly eight cents, while Adani Transmission's bonds also saw declines of more than five cents, trading just above 80 cents. These declines mark the steepest drop since February 2023, following a report by short-seller Hindenburg Research, which raised concerns about the Adani Group's debt levels and use of tax havens.

Adani indicted in bribery scheme

Billionaire Gautam Adani has been accused of paying hundreds of millions of dollars in bribes and concealing these payments from investors, according to US prosecutors.

"This indictment alleges schemes involving over $250 million in bribes to Indian government officials, deceiving investors and banks to raise billions of dollars, and obstructing justice," deputy assistant attorney general Lisa Miller was quoted as saying by AFP.

Gautam Adani, 62, his nephew Sagar Adani, 30, Adani Green Energy executives, and Cyril Cabanes, an Azure Power Global Ltd executive, face charges of conspiracy to commit securities and wire fraud. The allegations concern a multi-billion-dollar scheme to secure funds from US investors and global financial institutions through false and misleading statements, PTI reported.

The US Securities and Exchange Commission (SEC) has alleged the bribery scheme was devised to enable renewable energy firms Adani Green and Azure Power to profit from a multi-billion-dollar solar energy project awarded by the Indian government. The charges include violating antifraud provisions of federal securities laws, with the SEC seeking permanent injunctions, civil penalties, and bans on holding executive positions, PTI added.

The SEC stated that during the alleged scheme, Adani Green raised over $175 million from US investors, while Azure Power's shares were traded on the New York Stock Exchange. Simultaneously, the US Attorney's Office for the Eastern District of New York unsealed criminal charges against Gautam Adani, Sagar Adani, Cyril Cabanes, and others linked to Adani Green and Azure Power.

The federal indictment, revealed in Brooklyn, accuses five additional individuals of conspiring to violate the Foreign Corrupt Practices Act as part of the bribery scheme. This scheme relates to one of the world's largest solar energy projects.

Gautam Adani and seven other executives are accused of bribing Indian government officials to secure lucrative contracts and misleading investors about corruption, while allegedly attempting to obstruct investigations, FBI assistant director James Dennehy stated.

(With PTI, Reuters, AFP)