Adani Group plunged after Chairman Gautam Adani accused of fraud in New York

India’s Adani Group saw shares of its companies fall Thursday after its billionaire chairman Gautam Adani was indicted in a New York federal court for his alleged involvement in a massive corruption and fraud scheme.

The 62-year-old billionaire and the seven other defendants were accused of paying more than $250 million in bribes to Indian government officials to secure solar power contracts that could generate more than $2 billion dollars in profits.

The Indian group’s flagship, Adani Enterprises, fell 23%, while the company in the eye of the storm Adani Green Energy fell 18.95%. Adani Energy fell 20%.

Adani Power lost 14.48%, Adani Port’s share price fell 20%, while the group’s retail arm, Adani Wilmar, lost 10%.

The reference NSE Nifty 50 The index slipped 0.87%.

Adani, along with two executives of Adani Green Energy Limited – his nephew Sagar Adani and Vneet Jaain – were accused of misleading US and international investors about the company’s compliance with anti-bribery and bribery standards , while raising more than $3 billion to finance energy projects.

Adani Green Energy has canceled plans to raise funds via US dollar-denominated bonds, Reuters reported.

“These are very serious accusations,” said David Riedel, president and founder of the Riedel Research Group. “They will definitely be cut off from U.S. markets,” he said, adding that Adani may have to seek domestic sources of financing.

Riedel also expects more trouble in Adani-affiliated stocks: “They’re probably going to give back everything they’ve earned over the last year.”

The five-count indictment in U.S. District Court in Brooklyn also charges Ranjit Gupta and Rupesh Agarwal, former executives of renewable energy company Azure Power Global, as well as three former employees of the investor Canadian institutional Caisse de Dépôt et Placement du Québec — Saurabh Agarwal. , Cyril Cabanes and Deepak Malhotra.

The CDPQ said it was aware of the accusations filed. “These employees were all laid off in 2023 and the Fund is cooperating with the American authorities,” the investor said in an email.

It comes after the conglomerate spent most of the last year trying to move beyond allegations of accounting fraud and “brazen stock manipulation” made by short-selling firm Hindenburg Research.

“Since the release of our January 2023 report identifying Adani as the largest corporate scam in history, we have never doubted our views, and Adani has never refuted our findings,” said Hindenburg in a statement to CNBC on Thursday.

The conglomerate refuted the claims, adding that it had “always complied with all laws.”

These accusations do not change the “strong underlying fundamentals” of the Indian market or the country’s growth trajectory, said Matt Orton, head of advisory solutions and market strategy at Raymond James.

“Once the dust settles, there will be even better opportunities for long-term investors in India,” he said.

—CNBC’s Dan Mangan contributed to this report.