Adani Group stocks go into a tailspin, crash up to 23% after US indicts Chairman and 7 others on bribery charges

Adani Group Stocks: Several Adani Group shares, including those of the flagship firm Adani Enterprises, suffered massive losses and hit their lower circuits in early trade on Thursday, November 21. This was after Gautam Adani had been indicted in New York over his role in an alleged multibillion-dollar bribery and fraud scheme.

According to US authorities, more than $250 million in bribes were promised to Indian Government officials to secure solar energy contracts.

"A five-count criminal indictment was unsealed today in federal court in Brooklyn charging Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, executives of an Indian renewable-energy company (the Indian Energy Company), with conspiracies to commit securities and wire fraud and substantive securities fraud for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions on the basis of false and misleading statements," said a statement from US Attorney's Office, Eastern District of New York.

"The indictment also charges Ranjit Gupta and Rupesh Agarwal, former executives of a renewable-energy company with securities that had traded on the New York Stock Exchange (the U.S. Issuer), and Cyril Cabanes, Saurabh Agarwal and Deepak Malhotra, former employees of a Canadian institutional investor, with conspiracy to violate the Foreign Corrupt Practices Act in connection with a bribery scheme also perpetrated by Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, involving one of the world’s largest solar energy projects," it said.

Adani Group denied the allegations and said it will seek all possible legal recourse.

"The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied," it said.

"The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations. We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws," it added.

Stocks go into a tailspin

Adani Energy Solutions stock hit its 20 per cent lower circuit of ₹697.70 on BSE. Similarly, shares of Adani Enterprises and Adani Ports and Special Economic Zone plunged 23 per cent each on BSE. Ambuja Cements share price plunged 18 per cent.

Shares of Adani Green Energy plunged 20 per cent, while those of Adani Power and Adani Total Gas nosedived 18 per cent each. Adani Wilmar share price fell 10 per cent. Other group stocks, such as ACC and NDTV, cracked 15 per cent and 14 per cent, respectively, in morning trade on BSE.

Meanwhile, shares of Australia-listed fund manager GQG Partners, which is a large shareholder in India’s Adani Group stocks, plunged 20% on Thursday, November 21.

Massive m-cap loss

The sharp selloff in the group stock wiped out approximately ₹2 lakh crore from the Adani Group's overall market capitalisation (m-cap). According to Capital Market data, the group's total market capitalisation declined to nearly ₹12.43 lakh crore, down from ₹14.31 lakh crore in the previous session.

Meanwhile, Adani Group scrapped a $600 million dollar bond on Thursday after the US indicted Adani. The group’s existing US-currency notes plunged in Asian trading.

Last year in January, a US-based short-seller, Hindenburg Research, accused Adani Group of using offshore tax havens improperly. The report triggered a sharp selloff in Adani Group stocks, causing an approximately $150 billion outflow in the group stocks.

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