Shadow of US prosecutor’s bribery charge on Adani?
The US prosecutors have charged Indian billionaire businessman Gautam Adani for alleged role in a $265 million bribery scheme. This has once again put the conglomerate in the eye of the storm in political and business circles. On November 21, resultant of the prosecutors' allegations Adani group stocks faced a bloodbath in the morning trade with the combined market valuation of all the listed firms getting eroded, even if notionally, by Rs 2.45 lakh crore (Tk 3. 48 lakh crore). Thus, for the second time in two years, the conglomerate has been plunged deep into a crisis.
The charges by the US prosecutors follow the turmoil the Adani Group faced last year after American short-seller Hindenburg Research issued a report that accused it of using offshore tax havens improperly, a charge the company has denied. The Hindenburg report had sliced off more than $135 billion in market value from Gautam Adani's business empire. The Adani Group dismissed the charges by the US prosecutors as "baseless". "The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied," the conglomerate said in a statement, adding "all possible legal recourse will be sought."
For all latest news, follow The Daily Star's Google News channel. 
The latest charge against Adani has given fresh ammo to the main opposition Congress whose chief spokesman Jairam Ramesh suggested that the monopoly of the Adani group is confined not only to key sectors of India's economy but posed "huge foreign policy challenges" in India's South Asian neighbourhood. Ramesh did not name any country but it is not a rocket science to miss that his reference was possibly to the raging controversy over the Adani Power-Bangladesh power deal.
Commenting on the US prosecutors' charges, Ramesh took to X, formerly Twitter, to say that "The INC (Indian National Congress) reiterates its demand for a JPC into the transactions of the Adani Group, which is leading to growing monopolisation in key sectors of the Indian economy, fuelling inflation, and posing huge foreign policy challenges as well, especially in our neighbourhood."
Turning on the heat hours after the news broke about the American prosecutors' allegations against the Adani group, India's leader of the opposition Rahul Gandhi addressed a press conference and demanded Adani's "immediate arrest" saying it was "clear and established in the United States that Gautam Adani broke Indian and American laws." Rahul also once again brought Prime Minister Narendra Modi into his line of fire by saying he "can guarantee Adani won't be investigated because of the 'protection' he receives from the government. "If Prime Minister Narendra Modi and Adani are together, they are safe in India." This is an unmistakable jibe by Rahul at Modi's slogan "Ek hain to safe hain" frequently used in a different political context in recent campaigns for assembly elections in Maharashtra and Jharkhand. Rahul also doubled down on his party's demand for a probe by a Joint Parliamentary Committee into the various "scams" involving the Adani Group.
The timing of the US prosecutors' charge can hardly be missed. It came just a couple of days before Indian parliament's winter session begins on November 23 when the opposition parties are sure to target the Adani group as well as Modi in the House. Rahul told the media, "As the Leader of the Opposition, I will raise this issue in Lok Sabha. Our demand for JPC stands."
It remains to be seen how the political impact of the US prosecutors' charges against the Adani group plays out. However, it has begun manifesting the negative fall-out on the business front as the Adani group has scrapped $600 million bond offering. It may be recalled that the first Hindenburg report had halted the company's financial plans but its second report has so far failed to scuttle its fundraising drive.
True, the Adani group has managed to weather the storm after the Hindenburg report. The Adani conglomerate companies have performed well in the stock market this year and its earnings in the first quarter of financial year 2024- 2025 have boosted investors' confidence. But such optimism is always tempered with caution stemming from apprehensions. The group may once again do so after the US prosecutors' charges. But business analysts say it has amplified the risks associated with emerging stock markets, particularly raising the issues of governance, transparency and regulatory scrutiny. Indian media reports quoting data say foreign institutional investors have shrunk their stakes in Adani's major companies since 2023.
Will a disruption of the Adani group's fund-raising plans affect its capital expenditure in green energy and infrastructure projects and attempts to cut its debt exposure which as of the end of financial year 2023-24, stood at Rs 50,124 crore (Tk 71,176 crore)?
Pallab Bhattacharya is a special correspondent for The Daily Star. He writes from New Delhi, India.
Views expressed in this article are the author's own.
Follow The Daily Star Opinion on Facebook for the latest opinions, commentaries and analyses by experts and professionals. To contribute your article or letter to The Daily Star Opinion, see our guideline for submission.
Comments