Adani Group Shares Fall Amid SEC Charges of Bribery and Fraud

TLDR

• Shares of Adani Group companies fell sharply following SEC court filings on bribery and fraud charges.
• The SEC seeks permission to issue summons to Gautam and Sagar Adani regarding misleading investors and corruption.
• The Adani Group is accused of raising $3 billion by securing energy contracts through illegal payments to officials.
• Adani Green Energy dropped nearly 14%, and Adani Enterprises saw a 10.7% decline due to the news.
• The SEC’s filing details a $250 million bribery scheme to obtain $2 billion in solar energy contracts.

Shares of Adani Group companies dipped on Friday following court filings from the U.S. Securities and Exchange Commission (SEC). According to CNBC, the filings indicate the SEC is seeking to send summons to Adani Group Chairman Gautam Adani and Sagar Adani, the executive director of Adani Green Energy, in relation to bribery and fraud charges.

U.S. SEC Seeks to Issue Summons to Adani Executives

The SEC has approached U.S. District Judge Nicholas Garaufis in Brooklyn to request permission to issue a legal summons. This action targets Gautam Adani and Sagar Adani in connection with charges of misleading international investors regarding anti-bribery and anti-corruption practices. 

The SEC claims the Adani Group executives raised more than $3 billion by securing energy contracts while making illegal payments to Indian government officials. The SEC’s filing also states that the Indian Ministry of Law and Justice rejected two requests last year to serve the summons under the Hague Convention.

According to the SEC, the Ministry contended that it lacked the authority to allow the summons to be served. This legal challenge marks a critical moment in the ongoing investigation into the Adani Group’s financial practices.

Adani Group Shares See Sharp Declines

Shares of Adani Green Energy closed nearly 14% lower, reflecting the market’s reaction to the news. The company’s stock price drop follows the filing of charges related to bribery and fraudulent activities. Similarly, Adani Enterprises, one of the flagship companies of the Adani Group, saw a 10.7% drop in its share price.

Adani Power, another major player in the group, also saw a 5.7% decline. The SEC’s court filings describe a bribery and fraud scheme involving the payment of more than $250 million in bribes to secure solar energy contracts. The contracts, which generated more than $2 billion in profits, were allegedly obtained through corrupt dealings with Indian government officials.

The SEC’s charges suggest a coordinated effort by the Adani Group to mislead investors about the legality of their business practices. The U.S. federal court is expected to review the SEC’s request to issue the summons to the Adani executives. Meanwhile, the ongoing investigation into the Adani Group’s practices continues to unfold, with potential legal consequences for those involved.