Gautam Adani, India’s second-richest man and chairman of the Adani Group, faced a staggering loss of ₹88,726 crore in net worth on Thursday, November 21, 2024. This dramatic decline followed allegations by US authorities involving a multibillion-dollar bribery and fraud scheme.
Key Highlights of the Scandal
- Net Worth Loss: Gautam Adani’s net worth dropped by $10.5 billion (₹88,726 crore) in a single day.
- Market Capitalisation Impact: Adani Group’s market capitalisation declined by over ₹2 lakh crore, reducing from ₹14.31 lakh crore to ₹12.1 lakh crore.
- Bribery Allegations: US authorities alleged that over $250 million in bribes were promised to Indian government officials to secure solar energy contracts.
Details of the US Bribery Indictment
The US Attorney’s Office for the Eastern District of New York unsealed a five-count criminal indictment charging:
- Gautam Adani,
- Sagar Adani,
- Vneet S. Jaain,
- Other executives and employees of Adani’s renewable energy ventures.
Allegations
The indictment accuses the defendants of:
- Securities Fraud: False and misleading statements to secure investments.
- Wire Fraud: Misusing funds obtained from global investors and financial institutions.
- Bribery Scheme: Violating the Foreign Corrupt Practices Act to win contracts for one of the world’s largest solar energy projects.
Impact on Adani Group Stocks
As per livemint new site, The bribery scandal triggered a massive sell-off in Adani Group shares:
- Adani Enterprises and other flagship stocks hit their lower circuit during early trading.
- The group’s market valuation dropped sharply by over ₹2 lakh crore.
Adani Group’s Response
The Adani Group denied all allegations and pledged to fight the charges:
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“The allegations made by the US Department of Justice and the US Securities and Exchange Commission are baseless and denied. The Adani Group remains committed to the highest standards of governance, transparency, and regulatory compliance.”
The group also confirmed its decision to cancel a proposed US dollar-denominated bond offering following the indictment.
Hindenburg Research Scandal: A Déjà Vu?
This latest controversy echoes the Hindenburg Research allegations from 2023, where the Adani Group was accused of:
- Stock Price Manipulation
- Corporate Fraud
The 2023 allegations caused the Adani Group’s companies to lose $68 billion in market value, marking one of the biggest controversies in Indian corporate history.
Adani Group’s Defense
In response to Hindenburg’s claims, Adani had presented detailed documents, asserting full compliance with regulatory norms.
Current and Future Outlook
The latest scandal further dents the credibility of Adani Group in the global financial markets. While the US Department of Justice emphasizes that the defendants are presumed innocent until proven guilty, the allegations have cast a shadow over Adani’s renewable energy ambitions.
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FAQs
1. What led to the massive drop in Gautam Adani’s net worth?
The decline is due to allegations of bribery and fraud, causing a major sell-off in Adani Group shares.
2. What are the key charges in the indictment?
The charges include securities fraud, wire fraud, and violations of the Foreign Corrupt Practices Act.
3. How has the Adani Group responded?
The Adani Group has denied the allegations and committed to upholding transparency and compliance.
4. What is the significance of the Hindenburg allegations?
The Hindenburg allegations in 2023 accused Adani of corporate fraud, leading to a $68 billion market value loss at the time.
The future of the Adani Group hangs in the balance as global markets and investors react to these allegations. The group’s ability to recover will depend on its legal defense and steps to regain stakeholder trust.
