Photo: Reuters
Shares in India's Adani Enterprises experienced a 10% decline at Thursday's opening following US prosecutors accusing billionaire industrialist and founder Gautam Adani of paying hundreds of millions of dollars in bribes and concealing these payments from investors. The significant losses in Adani Group's flagship company were mirrored by substantial sell-offs in its other major businesses, with Adani Power dropping 11% and Adani Energy Solutions plummeting 20%.
The close associate of Prime Minister Narendra Modi is alleged to have agreed to pay over $250 million in bribes to Indian officials for lucrative solar energy supply contracts. These contracts were expected to yield more than $2 billion in profits after tax over approximately 20 years. None of the multiple defendants in the case, including Adani, are currently in custody. The Adani Group has not yet responded to the allegations.
With a business empire encompassing coal, airports, cement, and media, the Adani Group has faced significant challenges in recent years due to corporate fraud allegations and a stock market crash. Last year, the conglomerate lost $150 billion in market value following a damning report by short-seller Hindenburg Research, which accused it of 'brazen' corporate fraud. Gautam Adani, the founder of the family-run conglomerate and one of the world's wealthiest individuals, denied Hindenburg's initial allegations and described the report as a 'deliberate attempt' to harm its reputation for the benefit of short-sellers.
Hindenburg Research claimed in 2023 that the conglomerate had engaged in a 'brazen stock manipulation and accounting fraud scheme over the course of decades'. The report also highlighted a pattern of 'government leniency towards the group' that had discouraged investors, journalists, citizens, and politicians from challenging its conduct 'for fear of reprisal'. Jairam Ramesh, a member of India's main opposition Congress Party, stated on Thursday that the indictment 'vindicates' their call for a parliamentary inquiry into Adani. Ramesh criticized the 'abject failure' of the Securities and Exchange Board of India (SEBI) to hold the Adani Group accountable for the source of its investments.
Adani was born in Ahmedabad, Gujarat state, to a middle-class family but left school at 16 and moved to the financial capital Mumbai to work in the city's lucrative gem trade. After a brief period in his brother's plastics business, he established the flagship family conglomerate bearing his name in 1988 by venturing into the export trade.
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