India's political and financial sectors were thrown into turmoil after U.S. authorities indicted billionaire Gautam Adani and seven associates on charges of bribery and fraud. The allegations involve $265 million in bribes paid to secure contracts projected to yield $2 billion in profits over 20 years, as well as misleading public statements regarding an ongoing investigation since 2023. Adani Group dismissed the accusations as baseless, vowing to pursue all legal avenues to defend itself. This latest crisis follows previous claims of impropriety leveled against the conglomerate by Hindenburg Research in 2023.
Global repercussions mounted as French energy giant TotalEnergies announced it would freeze further investments in Adani’s businesses until the allegations are clarified. TotalEnergies, which holds a 20% stake in Adani Green Energy, emphasized its strict anti-corruption stance and claimed it was unaware of the U.S. investigation prior to the charges. This decision sent shockwaves through Adani Group’s stocks, with shares of Adani Green Energy plummeting 11% before closing 7.9% lower. Meanwhile, investors further cut exposure to Adani’s dollar bonds, intensifying financial pressure on the conglomerate.
The fallout extended beyond financial markets, with political chaos erupting in India. Both houses of parliament were suspended as opposition lawmakers demanded a detailed discussion of the Adani allegations, accusing Prime Minister Narendra Modi of shielding his longtime ally. Congress party members held protests near parliament, calling for Adani’s arrest and warning that the scandal could tarnish India’s global image. While the Modi government has not commented directly on the case, it dismissed the accusations of favoritism as baseless.
International scrutiny also deepened. In Kenya, President William Ruto canceled a controversial airport contract linked to Adani, while Bangladesh initiated reviews of power contracts involving the group. Within India, banks and global lenders reportedly began reconsidering their financial ties with Adani, some halting fresh credit while maintaining existing loans. These moves highlight growing concerns about the conglomerate's ability to weather the escalating legal and reputational storm.
Amid these developments, Adani Group’s market valuation has taken a massive hit, losing $28 billion over two sessions last week. Stocks of key subsidiaries, including Adani Power and Adani Transmission, recorded significant declines. As opposition parties continue to pressure the government for accountability, the scandal threatens to reshape India’s political and economic landscape, with far-reaching implications for its global reputation.
