The Adani Group is currently navigating a major crisis following U.S. allegations of bribery and fraud, which have led several nations and investors to reconsider or halt their financial commitments to the Indian conglomerate. Gautam Adani, the billionaire chairman of the Adani Group, faces indictment for allegedly using bribery and fraud to secure contracts for Adani Green Energy, one of the group’s subsidiaries.
Despite the strong denial from the Adani Group, which has labeled the accusations as “baseless,” the financial consequences have been severe. The group’s 10 listed entities have collectively lost around $33 billion in market value since the charges were brought forward. Among the hardest-hit companies is Adani Green Energy, which alone has seen its market value plummet by nearly $9.7 billion.
Here are the key details of the stalled and scrapped deals:
1. TotalEnergies Halts Investment
The French oil major has announced that TotalEnergies will not be investing in the Adani Group anymore, as they claim not to have known about the bribery charges before they came out in the United States. The French major owns 20% of Adani Green Energy and has its total financial exposure estimated at between $4 billion and $5 billion for the group, as per Bernstein Research. Following the announcement, Adani Green Energy shares dropped by more than 11%, and Adani Total Gas, which has a 37.4% stake in Total, slipped by 1.4%.
2. U.S. International Development Finance Corp’s Review
The project for which DFC was expected to lend $550 million is a port development initiative with Adani Group in Sri Lanka, considering its options afresh. Last November, the DFC had committed this amount for financing the project based in the key city of Colombo. However, the new allegations against Gautam Adani have placed that deal under close scrutiny, and hence the shockwaves of fresh allegations are being felt all across project financing as well.
3. Sri Lanka’s Scrutiny of Adani Projects
The Sri Lankan authorities have been looking into the allegations against the Adani Group. No official decision has been taken so far, but the government is taking the matter quite seriously and reviewing all aspects of the current and future projects of the group into the country.
4. Kenya Cancels $2 Billion Airport Deal
Kenya also scrapped a $2 billion procurement exercise that would have given the Adani Group management of its most international airport. The deal was meant to expand the Jomo Kenyatta International Airport with a second runway and terminal enhancements under a 30-year lease agreement. A separate $736 million public-private agreement signed by Adani Energy Solutions with Kenya’s energy ministry has been scrapped, too.
5. Bangladesh Investigates Power Contracts with Adani
Bangladesh has set up a committee to look into its power generation contracts, especially the ones inked under the tenure of former prime minister Sheikh Hasina, which include a deal with Adani Power. The committee has recommended that the interim government should get a global legal firm to audit these contracts thoroughly and transparently.
6. Andhra Pradesh Weighs Cancelling Power Supply Contract
The Indian state of Andhra Pradesh is considering the cancellation of a power supply contract associated with the Adani Group. This follows the revelations in the U.S. bribery indictment, which alleges that over $265 million in bribes were paid to Indian government officials to secure solar power supply contracts in various states, including Andhra Pradesh. According to the report, Andhra Pradesh received the lion’s share of the bribes, amounting to approximately $228 million.
As the legal and financial fallout continues to unfold, the Adani Group faces significant challenges as several international stakeholders reassess their relationships with the conglomerate. The consequences of these halted investments and reevaluated deals may further impact the group’s future growth and reputation on the global stage.
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