Adani group stocks such as Adani Enterprises Ltd, Adani Green Energy Ltd, Adani Energy Solutions Ltd and Adani Power Ltd would be in focus on Friday morning after falling up to 23 per cent in the previous session.
The Adani stocks fell yesterday, with the Adani group Chairman Gautam Adani losing $12.1 billion in notional wealth as per Forbes, after US prosecutors charged Adani and his nephew Sagar Adani in an alleged $250 million bribery scheme that they said was concealed from US investors while raising funds. Following this, arrest warrant was issued against Gautam Adani as per Reuters, Adani Green Energy halted its planned issuance of $600 million in US dollar-denominated bonds, while Adani Energy Solutions reportedly lost a $736 million public-private partnership contract in Kenya.
GQG Partners, one of Adani group’s investors and whose shares fell 19.32 per cent in the previous session, said it was monitoring the charges brought by the US Attorney’s Office for the Eastern District of New York and the US Securities and Exchange Commission, adding that “Our team is reviewing the emerging details and determining what, if any, actions for our portfolios are appropriate,” it said.
Following this, GQG Partners shares climbed 7.5 per cent in Australian trading earlier today. To recall, GQG was the first big investor in Adani group shares following scathing report by the US-based short-seller Hindenburg Research in January 2023.
Meanwhile, there are also concerns over the Adani group’s fund raising ability, with Moody’s Ratings suggesting it would look at Adani Group’s governance practices when assessing ability to access capital following the bribery charges. It said indictment of the group’s chairman and other senior officials on bribery charges is credit negative for the group’s companies.
A senior SEBI official told Informist that the market regulator SEBI may consider stepping in the matter of a US federal court’s indictment of Gautam Adani and some other Adani Group officials, only if cooperation is invoked under the inter-regulatory bilateral memorandum of understanding with the US Securities and Exchange Commission.
Adani group has denied the charges that it called baseless, noting that the US Department of Justice statement itself suggested that the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty. The group said it would take all possible legal recourse.
Analysts noted that US laws allow for settlements in bribery cases, often through Non-Prosecution Agreements (NPAs) or Deferred Prosecution Agreements (DPAs) . Companies can resolve charges by paying fines, admitting certain wrongdoing, and improving compliance practices, they said.
“Notable precedents, like Siemens ($800 million) and Ericsson ($1 billion), suggest Adani may pursue a settlement to cap reputational and financial losses,” Narinder Wadhwa, Managing Director at SKI Capital said.
US markets closed 0.5-1 per cent higher overnight. Asian markets were trading mixed.
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