Global banks are reportedly considering a temporary suspension of new loans to the Adani Group, owned by Indian billionaire Gautam Adani, following allegations of corruption brought against him in the United States. The allegations, which have sent ripples through financial markets, were disclosed by Reuters, citing sources familiar with the matter.
US Corruption Charges
On 21 November, US authorities accused Adani and seven others of conspiring to bribe Indian officials with $265 million to secure contracts potentially yielding $2 billion in profits over the next two decades. These projects included developing India’s largest solar energy initiative. In a related civil case, the US Securities and Exchange Commission (SEC) has also levelled accusations against the conglomerate.
The Adani Group has categorically denied these charges, calling them “baseless and disputed,” and stated its intention to pursue all possible legal remedies.
Impact on Financial Markets
The fallout has already begun to manifest. Bonds issued by Adani Group plummeted in value on Friday, 22 November, following an initial decline after the announcement of the US case. Although shares of some group companies managed to recover partial losses, the overall market capitalisation of the group’s 10 listed firms dropped by $27.9 billion over two trading days.
Research firm CreditSights has identified refinancing for the group’s green energy ventures—central to the allegations—as the most immediate challenge. Meanwhile, S&P has warned that the conglomerate’s ambitious growth plans rely heavily on consistent access to capital and debt markets.
Bank Reactions and Regulatory Scrutiny
Executives at two global creditors have reportedly been in discussions about the financial risks associated with the Adani Group in light of the US indictment. According to Reuters, several international banks are contemplating a halt to new lending but intend to maintain existing credit arrangements.
Indian financial regulators are also closely monitoring the situation. The Securities and Exchange Board of India (SEBI) is conducting preliminary inquiries into whether the disclosures made by Adani companies complied with local market regulations. SEBI has not commented on the progress of these investigations.
Gautam Adani: A Controversial Figure
Ranked as India’s second-richest individual by Forbes in November 2024, Adani is surpassed only by Mukesh Ambani. His rise to wealth and power has been marked by both his ventures in green energy and persistent allegations of misconduct.
The allegations come at a critical juncture for the Adani Group, which has been positioning itself as a leader in renewable energy. The accusations of bribery could undermine the group’s credibility with global investors and derail its green energy initiatives.
Broader Implications
This latest controversy adds to the growing scrutiny surrounding Adani’s financial practices. Earlier in the year, the group faced allegations of stock price manipulation and regulatory non-compliance, although no conclusive findings were made. The current US charges, however, could have far-reaching implications for the conglomerate’s ability to secure financing for its projects.
With credit markets tightening, the group’s ability to navigate this crisis will be critical. Analysts predict that the group’s debt refinancing efforts will likely face heightened scrutiny from investors and creditors in the coming months.
