India’s Adani Group announced a nearly $55 billion loss in market value after U.S. prosecutors last week accused the conglomerate’s founder and top officials of fraud, sparking a major sell-off in its stocks.
The charges, filed on November 20, allege that Gautam Adani, the billionaire founder, and several associates intentionally misled international investors as part of a bribery scheme. The indictment claims they offered, authorized, and promised bribes to Indian government officials in exchange for lucrative contracts.
Adani Group, which denies the allegations, said in a statement on Wednesday that its market capitalization has dropped by nearly $55 billion across its 11 listed companies since the charges were made public. Despite the setback, Adani Enterprises saw a slight recovery, rising 1.8% on Wednesday, though the group’s key firms have lost more than 20% of their value since the indictment.
The company issued a firm denial, clarifying that the charges only involve securities fraud and wire fraud conspiracy, not bribery or corruption as some reports suggested. The group stressed that neither Gautam Adani nor his nephew Sagar Adani had been charged with bribery.
Adani, once the world’s second-richest man and a close ally of India’s Prime Minister Narendra Modi, has long faced criticism over his business dealings and the alleged benefits derived from his relationship with the government. The charges have triggered significant consequences, including the cancellation of international projects and heightened scrutiny from investors and strategic partners.
In Kenya, President William Ruto announced that the Adani Group would no longer be involved in expanding the country’s electricity network or its main airport. The group was set to invest $1.85 billion in Jomo Kenyatta Airport and $736 million in a state-run utility project.
Sri Lanka has also initiated an investigation into the group’s local investments, including a $442 million wind power deal and a deep-sea port terminal in Colombo, which is expected to cost over $700 million.
The Adani Group has faced allegations of corporate fraud before, notably in 2023, when a report by short-seller Hindenburg Research accused the conglomerate of “brazen” financial misconduct. Adani denied the claims, calling them a deliberate attempt to harm the group’s reputation.
With interests spanning coal, airports, cement, and media, Adani’s rapid expansion into capital-heavy industries has raised concerns about the group’s financial stability. CreditSights, a Fitch subsidiary, warned in 2022 that the conglomerate was “deeply over-leveraged.”
In India, opposition lawmakers disrupted parliamentary proceedings for the second consecutive day on Wednesday, demanding a discussion of the U.S. charges against Adani Group. Congress leader Rahul Gandhi called for the arrest of Gautam Adani, accusing the government of shielding him from investigation.
The ruling Bharatiya Janata Party (BJP) has distanced itself from the controversy, with spokesperson Gopal Krishna Agarwal stating that the law should take its course and that the party has no reason to defend Adani.
As the legal and political fallout continues, the Adani Group is bracing for further challenges both domestically and internationally.
