Signed above Adani Group headquarters in Ahmedabad, India on Wednesday, February 1, 2023. Bonds of the flagship firm of Indian billionaires fell to alarming levels in US trade, and the company suddenly pulled a record domestic stock offering.
Bloomberg | Bloomberg | Getty Images
The Adani group is struggling on several fronts as investors and partners are rethinking ties with the Indian group in the wake of allegations of bribery and fraud by US authorities.
Projects and investments related to the businesses of Indian conglomerates spread across the world have come under the spotlight, as follows US indicts its billionaire founder last Thursday on charges of bribery and fraud.
“The US indictment is likely to limit the group’s access to new financing in the near term, particularly in offshore capital markets,” Leonard Law, a senior credit analyst at Lucro Analytics, told CNBC. Denied any wrongdoing..
The allegations are “more serious” than short sellers Hindenburg Research reported in 2023, and legal proceedings are likely to be lengthy. He added.
Fitch Ratings Many have been put Dollar bonds issued by Adani group companies are on their negative rating watch list, which means the bonds could potentially be downgraded.
The action reflects high corporate governance risk and “potential contagion risk” that could affect access to funding and liquidity.
After last week’s bombshell indictment, which triggered a sell-off in the group’s stocks, Kenyan President William Ruto About $2.5 billion worth of airport and power deals with the group were scrapped, Reuters reported.
French energy giant TotalEnergies, Suspended new investments on Monday linked to the Adani Group and claimed that it was not informed of the probe into the alleged corruption scheme.
“Until the allegations against Adani Group individuals and their consequences are clarified, TotalEnergies will not make any new financial contributions as part of its investment in the Adani Group of companies,” the French company said.
Shares in the French oil major, which owns a 19.75% stake in Adani Green Energy and a 50% stake in joint ventures with Adani Green, fell 2.4% on Monday.
America International Development Finance Corporation said It will review its previous agreements. lend $553 million.oa Sri Lanka port development backed by Adani Group.
“DFC is aware of the recent allegations related to Adani and is actively evaluating the impact in light of the DOJ’s recent announcement,” a development agency official said in a statement.
Summons, further investigation, demand for arrest
Federal prosecutors in New York last week indicted Adani Group Chairman Gautam Adani and seven others on charges of paying nearly $265 million in bribes to Indian government officials to secure solar power contracts spanning 20 years. I could have a profit of more than 2 billion dollars. .
The charges include misleading U.S. and international investors about compliance with bribery and anti-corruption practices, while raising more than $3 billion in capital to fund these energy contracts.
In addition to his state legal battle, Adani and his nephew, Sagar Adani, were Allegedly He was subpoenaed by the US Securities and Exchange Commission for alleged involvement in bribery.
Adani Group representatives did not immediately respond to CNBC’s request for comment on Tuesday. The company previously said that the US authorities’ allegations “baselessAnd that it would seek “all possible legal recourse.”
Meanwhile, India’s opposition leader Rahul Gandhi has already… Demanded Adani’s arrest.According to domestic media.
Indian Securities is a watchdog. Allegedly are investigating whether the Adani Group failed to disclose information about the US DOJ’s investigation into its bribery allegations.
There was action in the Parliament of the country. Monday was suspended after disruptions. Lawmakers who demanded a debate on Adani’s corruption allegations.
A fresh application has also been made. Filed in Supreme Court of India. According to local media, Indian authorities have called for an investigation into allegations of bribery.
The Adani Group spent much of the last year in this effort. Forward a horror report. by short-seller Hindenburg Research who accused him of financial mismanagement and stock manipulation.
Shares of the Indian conglomerate’s flagship firm Adani Enterprises have fallen more than 20 percent since the indictment notice as of Tuesday, while Adani Green Energy has lost more than 35 percent in the eye of the storm.
Adani Power has lost nearly 15 percent, while shares of Adani Ports and Special Economic Zone have fallen 11 percent since then.