Adani Group stocks crash as US SEC files bribery and fraud charges against top executives
PTC Web Desk: Shares of Adani Group companies plunged sharply on Thursday, following an announcement by the United States Securities and Exchange Commission (SEC) that it was pursuing charges against Gautam Adani, chairman of the Adani Group, Sagar Adani, and Cyril Cabanes, a senior executive of Azure Power Global Ltd. The allegations centre around a bribery and fraud scheme intended to mislead investors and influence the Indian government.
The market reaction was immediate, with Adani Group stocks experiencing significant declines. Adani Green Energy Ltd, the company most closely linked to the allegations, saw its stock price drop by 17.44%, equivalent to Rs 246.25, reaching Rs 1165.50 by 11.45 am IST. Adani Enterprises Ltd, the flagship firm of the group, recorded a more severe decline, falling 20.29% or Rs 572.20, to Rs 2248.00.
US SEC's charges against Adani Group
The US SEC has accused Gautam Adani, Sagar Adani, and Cyril Cabanes of orchestrating a bribery scheme aimed at securing a lucrative energy deal with the Indian government. According to the SEC, the alleged scheme ensured the government would commit to purchasing energy from Adani Green and Azure Power at prices above market rates.
The SEC claimed that Adani Green raised over $750 million from global investors, including $175 million from American investors, as part of the alleged misrepresentation. Azure Power, with its shares listed on the New York Stock Exchange, also became embroiled in the controversy.
Sanjay Wadhwa, acting Director of the SEC’s division of Enforcement, said: “As alleged, Gautam and Sagar Adani induced US investors to purchase Adani Green bonds through a process that falsely portrayed the company as having a stringent anti-bribery compliance program. They also concealed that senior management had engaged in bribery or had plans to do so. Cyril Cabanes was an active participant in the bribery scheme while serving as a director of a US-listed company. We will persist in holding individuals accountable when they violate our securities laws.”
The SEC has requested permanent injunctions, civil penalties, and officer and director bars as part of its legal action.
Impact on Adani Group Stocks
The news sent shockwaves through the stock market, with significant losses reported across various Adani Group companies by mid-morning trading.
Adani Green Energy Ltd: Shares dropped by 17.44% to Rs 1165.50, reflecting a Rs 246.25 decline.
Adani Enterprises Ltd: Shares fell 20.29%, losing Rs 572.20 to settle at Rs 2248.00.
Adani Power Ltd: Shares declined by 10.80%, shedding Rs 56.60 to Rs 467.50.
Adani Ports and Special Economic Zone Ltd: Prices dipped 16.37%, down Rs 211.05 to Rs 1078.00.
Adani Wilmar Ltd: Fell 10.00%, losing Rs 32.70 to Rs 294.40.
Adani Total Gas Ltd: Dropped 13.13%, a loss of Rs 88.25 to Rs 584.00.
Ambuja Cements Ltd: Shares declined 10.75%, losing Rs 59.10 to Rs 490.50.
ACC Ltd: Shares fell 8.78%, losing Rs 191.85 to Rs 1993.20.
New Delhi Television Ltd (NDTV): Shares declined by 7.03%, losing Rs 11.90 to Rs 157.45.
The allegations have raised serious concerns among investors, both domestic and international, about corporate governance practices within the Adani Group. The group's ability to attract future investments and maintain credibility in financial markets may be significantly impacted.
Market analysts predict that regulatory scrutiny, both in India and abroad, is likely to intensify in the coming months. Additionally, the SEC's charges may influence other ongoing investigations into the Adani Group's business dealings.
- With inputs from agencies
