Adani shares sink again in India after founder’s US charges

Shares in Indian billionaire Gautam Adani’s conglomerate sunk again Friday after US charges alleging the tycoon paid more than $250 million in bribes to secure lucrative government contracts rattled investor confidence.

Wednesday’s bombshell indictment in New York accused Adani and multiple subordinates of deliberately misleading international investors as part of the bribery scheme.

Adani, once the world’s second-richest man, is a close ally of Hindu nationalist Prime Minister Narendra Modi and critics have long accused him of improperly benefitting from their relationship.

Shares in Adani Enterprises, his conglomerate’s main listed unit, sank more than four percent in morning trade, with similar losses in its listed ports and power subsidiaries.

Frenzied sell-offs on Thursday triggered multiple trading halts and Adani Enterprises has now lost more than a quarter of its market capitalisation since the indictment was released.

Adani Group issued a stiff denial of the charges against its directors on Thursday, describing them as “baseless” and announcing it would pursue “all possible legal recourse”.

India’s opposition leader Rahul Gandhi called for Adani’s arrest after the indictment was announced, but said his relationship with Modi would shield him from scrutiny.

“We demand that Adani be immediately arrested. But we know that won’t happen as Modi is protecting him,” Gandhi told reporters in New Delhi.

Wednesday’s indictment accuses Adani and multiple subordinates of paying bribes to Indian officials for solar energy supply contracts projected to generate more than $2 billion in after-tax profits.

None of the multiple defendants named in the case are in custody.

Modi’s government has yet to comment on the charges but a spokesman for his ruling Bharatiya Janata Party (BJP), Amit Malviya, said the indictment appeared to implicate opposition parties rather than his own.

With a business empire spanning coal, airports, cement and media, Adani Group has weathered previous corporate fraud allegations and suffered a similar stock crash last year.

The conglomerate saw $150 billion wiped from its market value in 2023 after a report by short-seller Hindenburg Research accused it of “brazen” corporate fraud.

It claimed Adani Group had engaged in a “stock manipulation and accounting fraud scheme over the course of decades”.

The report also said “government leniency towards the group” had left investors, journalists, citizens and politicians unwilling to challenge its conduct.

Denying Hindenburg’s allegations, Adani called its report a “deliberate attempt” to damage its image for the benefit of short-sellers.