Adani Group Faces U.S. Indictment: Dollar Bonds Plunge Amid $250 Million Bribery Scandal

Adani Green Energy Ltd. has withdrawn its planned $600 million U.S. dollar bond offering after facing serious allegations in the United States. The Eastern District of New York's court has charged the Adani conglomerate with bribery and civil securities fraud. The U.S. Securities and Exchange Commission (SEC) has accused billionaire Gautam Adani, the founder and chairman of the Adani Group, of deceiving American investors and bribing officials.

The SEC claims that the bribery scheme was designed to give Adani Green and Azure Power an advantage in a major solar energy project awarded by the Indian government. The complaint highlights violations of federal securities laws, seeking permanent bans, financial penalties, and restrictions on certain executive roles.

Following these charges, the prices of Adani's dollar bonds took a significant hit during early trading hours in Asia on Thursday, November 21, 2024. Specifically, bonds for Adani Port and Special Economic Zone, set to mature in August 2027, dropped by more than five cents per dollar. Debt issued by Adani Electricity Mumbai with a maturity in February 2030 decreased by nearly eight cents, while bonds from Adani Transmission also saw declines, trading just above 80 cents.

Arrest Warrants and Charges The U.S. judiciary has issued arrest warrants for Gautam Adani and Sagar Adani, with plans to forward these warrants to international law enforcement agencies. Prosecutors have alleged that the Adani family and a former executive at Adani Green Energy, Vneet Jaain, raised over $3 billion through loans and bonds, all while concealing their corrupt practices from investors and lenders.

The charges against Gautam Adani, Sagar Adani, and Jaain include securities fraud, conspiracy to commit securities fraud, and conspiracy to commit wire fraud. In addition to these criminal charges, the Adanis face a civil case brought forward by the U.S. SEC.

Impact on Credit Ratings The recent developments have drawn concern from financial analysts. Moody’s Ratings described the indictment of the Adani Group's leadership on bribery charges as a negative credit factor. According to the agency, the primary concern is the group's ability to secure capital for liquidity needs and maintain sound governance practices amid the allegations.

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