Adani group accused of ₹2,000 crore bribery, US takes legal action amid ₹2.86 lakh crore stock wipeout

The Adani Group, led by billionaire Gautam Adani, is at the center of yet another major controversy after U.S. prosecutors filed charges against the conglomerate for allegedly paying ₹2,000 crore in bribes to Indian government officials. The bribes were reportedly paid between 2020 and 2024 to secure solar power contracts with state electricity distribution companies.

Allegations Against the Adani Group

According to the indictment, the Adani Group concealed these bribes from investors and financial institutions while raising billions of dollars for their renewable energy projects. Since these funds were raised from U.S. investors and financial markets, the case falls under the jurisdiction of American authorities, who are empowered to act under the Foreign Corrupt Practices Act (FCPA). The contracts secured through the alleged bribery were expected to generate profits exceeding ₹16,000 crore over two decades.

Prosecutors claim that government officials were persuaded to enter power purchase agreements with state-backed agencies in exchange for bribes. A significant portion of these bribes was allegedly directed at officials in Andhra Pradesh. Encrypted communications and code names were used to keep the transactions hidden.

Impact on Adani Group Stocks

The indictment has had a dramatic impact on Adani Group stocks, with the conglomerate's total market capitalization plummeting by ₹2.86 lakh crore. Adani Enterprises, the flagship company of the group, witnessed a 23% drop in value, while Adani Ports & SEZ declined by 22.8%. Other group companies, including Adani Green Energy and Adani Power, also saw steep declines, further contributing to the overall losses. 

The Adani bribery scandal has also hit banking stocks hard, with the Nifty PSU Bank index dropping 5% on Thursday. Public sector banks, which hold over ₹39,000 crore in exposure to Adani Group, saw significant declines—SBI fell 5%, BoB dropped 8%, and PNB slipped 5%. Private banks like Axis Bank, ICICI Bank, and HDFC Bank also faced losses, reflecting market concerns over the group’s total ₹88,000 crore debt exposure to banks and NBFCs.

Adani group denies allegations

In response to the allegations, a spokesperson for the Adani Group dismissed the charges as "baseless and denied," emphasizing that the defendants are presumed innocent until proven guilty, as noted by the U.S. Department of Justice. The group reiterated its commitment to the highest standards of governance, transparency, and regulatory compliance across all jurisdictions, assuring stakeholders, partners, and employees of its law-abiding nature and intent to pursue all possible legal remedies.

Wider Implications

This development is the second major blow to the Adani Group, following allegations by Hindenburg Research in January 2023 that accused the conglomerate of stock manipulation and accounting fraud. Those accusations led to a loss of over $150 billion in market value. The opposition has wasted no time in intensifying its criticism of the government and the Adani Group, leveraging the allegations to raise fresh
concerns about their connections.

(Article has been updated to include Adani Group's response)