Adani Shares Plummet After Gautam Adani Faces US Indictment on Bribery Charges

US Bribery Charges Shake Adani Group

The business world watched with bated breath as the Adani Group, one of India's largest conglomerates, found itself embroiled in a major international scandal. The spotlight turned onto Gautam Adani, the chairman, and several senior executives who were indicted by the US Department of Justice on November 20, 2024. The allegations are staggering — a covert bribery operation involving around $265 million, supposedly paid to Indian officials to secure contracts poised to generate a whopping $2 billion in profits over the next two decades.

The length and complexity of the alleged scheme are reminiscent of a suspense novel. Reports suggest that the bribery funds were strategically concealed from lenders and investors, allowing the group to secure over $3 billion in loans and bonds specifically for Adani Green Energy. The intricacy did not end there; within the corridors of power, secretive code names like 'Numero uno' and 'the big man' were allegedly used to refer to Adani himself.

Stock Market Impact and Adani Response

The fallout was immediate and dramatic, hitting the Adani Group where it hurt most — on the stock market. Shares nosedived by up to 20% the day after the indictment, erasing a staggering $55 billion from the group's market capitalization. For investors, the shock was palpable, resonating through whispers and overt discussions about the conglomerate's future.

Despite the whirlwind of allegations, Adani Group quickly pushed back, firmly denying all charges. They maintained that the entire saga is baseless and insisted on their steadfast commitment to legal compliance. Such responses will likely not be surprising to those familiar with corporate legal entanglements; legal experts in some quarters have suggested that resolutions could be sought through Deferred Prosecution Agreements (DPAs) or Non-Prosecution Agreements (NPAs), drawing parallels with other global cases like those involving Siemens and Ericsson.

Interestingly, the beleaguered Adani stocks showed signs of resilience. Adani Green Energy shares experienced a 9.1% rebound by December 2. This comeback followed Gautam Adani's public address which emphasized the group's commitment to compliance and their resilience in the face of adversity, striking a somewhat reassuring chord with stakeholders and the market.

The unfolding drama surrounding Gautam Adani and the top executives of the Adani Group not only underscores the profound reputational risks international businesses can face but also how deeply intertwined such legal events are with market dynamics worldwide. As the case progresses, the keen scrutiny from global investors and analysts will likely continue, eager to decipher its broader implications on international trade and economics.