Adani bribery charges: The White House has indicated that the strong ties between India and the US would help the countries weather the allegations of bribery against billionaire Gautam Adani, who helms the Adani conglomerate. Adani has been charged by US prosecutors of being part of a scheme to pay over Rs 2,100 crore bribe to Indian officials in exchange for favourable terms for solar power contracts.
Before the conglomerate was levelled with the charges, Gautam Adani had congratulated new president-elect Donald Trump and announced that it would expand its clean energy business in the country as well as create jobs there. The industrialist had announced an investment of $10 billion in the US. However, with the charges of bribery against him, his nephew Sagar Adani, and other executives, the plans are expected to face some headwinds.
White House Press Secretary Karine Jean-Pierre acknowledged that the Joe Biden administration is aware of the charges against Adani. “Obviously we’re aware of these allegations, and I would have to refer you to the SEC (Securities and Exchange Commission) and DOJ (Department of Justice) about the specifics of those allegations against the Adani Group,” she said.
“What I will say is on the US and India relationship, we believe that it stands on an extremely strong foundation anchored in ties between our people and cooperation across a full range of global issues,” Jean-Pierre said, further adding, “What we believe and we’re confident about is that we’ll continue to navigate this issue as we have with other issues that may have come up as you just stated. And so the specifics of this, this is something that the SEC and DOJ can speak to directly, but again, we believe that…this relationship between India and the US has been built on a strong foundation.”
ADANI BRIBERY CHARGES FALLOUT
Adani group stocks such as Adani Enterprises, Adani Green Energy, Adani Energy Solutions and Adani Power fell up to 23 per cent in the previous session.
Following the charges of bribery, rating agency S&P Global Ratings stated that the group’s ability to access funding could be further impacted and lead to increased funding costs. The agency has revised its outlook to ‘negative’ for Adani Electricity Mumbai Ltd, Adani Ports and Special Economic Zone, and Adani Green Energy.
Shares of Adani Ports fell by 2.63 per cent to Rs 1,085.35, while Adani Green Energy shares dropped by 5.80 per cent to Rs 1,079.20.
S&P Global indicated that the negative outlook for these entities suggests their cash flows could be significantly affected if their access to funding weakens, their funding costs rise considerably, or if the allegations are proven. This is in addition to the agency’s assessment of their governance and business profiles.