Adani Green Energy has decided to suspend its plan to raise funds via US dollar-denominated bonds after he was indicted in the US for a multibillion-dollar bribery and fraud scheme, according to reports.
This came as dollar bond prices for Adani companies tumbled in early Asia trade following the indictment. The prices for Adani Port and Special Economic Zone debt maturing in August 2027 fell more than five cents on the dollar, while Adani Electricity Mumbai debt maturing in February 2030 fell nearly eight cents. The dollar bonds issued by
Adani Transmission too plunged over five cents, Reuters quoted LSEG data.
The indictment
The biggest falls since the release of last year’s Hindenburg Research report comes as Adani Group chairman Gautam Adani and seven other executives of his firm have been indicted by the US in a multibillion-dollar bribery and fraud scheme.
Adani’s co-defendants include his nephew Sagar Adani, the executive director of Adani Green Energy’s board, and Vneet Jaain, who was the company’s chief executive from 2020 to 2023 and remains managing director of its board.
The indictment unsealed on Wednesday in the United States District Court in the Eastern District of New York charges Adani and the others with duping investors by securing a huge solar energy project by bribing Indian officials.
The securities fraud and conspiracy to commit securities and wire fraud charges are in connection with the Adani Green Energy Ltd. mega project that aims to provide energy to millions of homes.
Adani, his nephew Sagar Adani and seven others allegedly agreed to pay about $265 million in bribes to Indian government officials to obtain contracts. They also duped the Wall Street investors, who poured several billion dollars into the project over the last five years, by concealing this matter. Prosecutors also said the Adanis and another executive at Adani Green Energy, former CEO Vneet Jaain, raised more than $3 billion in loans and bonds this way.
The project was expected to yield $2 billion in profit over 20 years for the group.
The businessman has been charged under the Foreign Corrupt Practices Act, a US law against bribery in foreign business dealings. “This indictment alleges schemes to pay over USD 250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice,” said Deputy Assistant Attorney General Lisa H Miller.
The offences were allegedly committed to obtain and finance massive state energy supply contracts as part of an elaborate scheme to “enrich themselves at the expense of the integrity of our financial markets,” the indictment read.
Meanwhile, the US Securities and Exchange Commission too accused Adani and two co-defendants of violating antifraud provisions of US securities laws. The regulator is seeking monetary penalties and other sanctions.
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