Major fallout for India’s Adani Group after US bribery indictment, and other key scandals

BENGALURU - Some nations and investors have either scrapped deals or stopped investments in the Adani Group, after the US indicted its billionaire chairman Gautam Adani for alleged bribery and fraud to win contracts for a group company, Adani Green Energy.

Adani Group has denied all the accusations as “baseless”, but the group said on Nov 27 that it had lost almost US$55 billion (S$73.9 billion) in a stock market rout since US prosecutors on Nov 20 accused its founder and other officials of fraud. Adani Green Energy is the hardest hit, losing about US$9.7 billion in market value.

A look at the conglomerate’s stalled deals and other scandals:

TotalEnergies stops new investments

French oil major TotalEnergies will not make any more investments in the Adani Group, saying that it was not informed of the US bribery charges against Adani.

TotalEnergies’ move was the first major fallout after the US authorities charged Adani and seven other people with agreeing to pay more than US$250 million in bribes to Indian government officials.

TotalEnergies, which has a 20 per cent stake in Adani Green Energy, said it rejects corruption in any form.

Prosecutors alleged Adani was part of a scheme to “corruptly offer, authorise, promise to pay and to pay bribes” of hundreds of millions of dollars to government officials in India. The alleged aim was to induce them to enter contracts that Adani Green Energy needed for India’s largest solar power plant project.

The prosecutors also alleged that Adani and others concealed the bribe scheme from banks and US investors as they tried to raise money. 

Shares of Adani Green Energy plunged more than 11 per cent after TotalEnergies’ statement, while those of Adani Total Gas, in which Total holds 37.4 per cent, closed down 1.4 per cent.

Sri Lanka examines projects by Adani

The US International Development Finance Corp is reviewing the impact of the indictment against Gautam Adani on the agency’s plan to lend US$550 million for a port development project in Sri Lanka partly owned by Adani Group.

In November 2023, the agency said it would provide financing for the port terminal project in the key city of Colombo.

Sri Lanka is studying the accusations against Adani Group and will consider all aspects of its projects in the island nation. The government is taking the concerns seriously but has made no final decision yet.

Troubles in Kenya

Kenyan President William Ruto said on Nov 21 that he had ordered the cancellation of a procurement process that had been expected to award control of the country’s main airport to Adani Group after its founder was indicted in the United States.

Under the proposed deal worth nearly US$2 billion, the Adani Group was to add a second runway at the Jomo Kenyatta international airport and upgrade the passenger terminal in exchange for a 30-year lease.

Kenya also scrapped a separate 30-year, US$736 million public-private partnership, signed by Adani Energy Solutions with its energy ministry in October 2024 to construct power transmission lines.

The deals have drawn sharp criticism from many politicians and members of the public over concerns about a lack of transparency and value for money.

Bangladesh to vet deals with Adani

Bangladesh has set up a committee to investigate its power generation contracts signed during the tenure of former prime minister Sheikh Hasina, one of them with Adani Power. The committee has urged the interim government to hire a global legal firm to ensure thorough and transparent vetting of the deals.

Adani Power reduced electricity supply to neighbouring Bangladesh in November 2024 after failing to recover more than US$800 million in dues, amid a political crisis in the country.

Andhra Pradesh state may cancel power supply contract

India’s southern state of Andhra Pradesh state is weighing the possibility of cancelling a power supply contract linked to the Adani Group, a top official told Reuters, after the US bribery indictments.

The indictment report said bribes of more than US$265 million were paid to Indian government officials to obtain solar power-supply contracts in several states, with Andhra Pradesh receiving most of the money, about US$228 million.

Vizhinjam port protests

Construction of the US$900-million port in southern India’s Kerala state was halted for about four months in 2022 as fishing workers protested, blaming the project for coastal erosion and affecting their livelihoods.

The Adani Group said the port complied with all laws and cited studies that showed it is not linked to shoreline erosion. The construction resumed in December 2022.

The port, which is billed to redefine Indian maritime business with its geographical proximity to the international shipping lane linking the maritime hubs in South Asia and South-east Asia, is scheduled to be commissioned in December 2024 or January 2025.

The latest controversy may affect the second phase of the port’s investment over the next four years, The Hindu newspaper reported on Nov 22. 

Dharavi redevelopment project

Adani’s US$619 million deal to redevelop Mumbai’s Dharavi slum, Asia’s largest, into a modern city hub has faced opposition from residents over his capacity to deliver. It also faced allegations that Prime Minister Narendra Modi’s allies treated Adani favourably, accusations the conglomerate denied.

The group struggled to secure land to rehouse the roughly 700,000 residents who would be displaced during the redevelopment.

Myanmar port sale

In October 2021, Adani Ports abandoned plans to build a container terminal in Myanmar after rights groups reported the company would be leasing the land for the project from a military-controlled firm under US sanctions.

The Adani Group company sold the project in May 2024 for US$30 million to Solar Energy, significantly lower than the US$127 million it invested in it. It is not immediately clear where the buyer is based.

Carmichael coal mine

The Carmichael coal mine, owned by Australia-based Adani Mining and located in Queensland, battled a seven-year campaign by climate activists before shipping its first cargo in December 2021.

Green groups worried about emissions and damage to the Great Barrier Reef opposed the project. Sustained protests scared off lenders, insurers and engineering firms.

The development of the mine was shrunk to 10 million metric tonnes a year from the previously envisioned 60 million tonnes a year.

Hindenburg v Adani

US short-seller Hindenburg Research alleged in January 2023 that Adani improperly used offshore tax havens and that certain offshore funds and shell companies tied to Adani Group “surreptitiously” owned stock in Adani’s listed firms. The group described the claims as baseless.

In August 2024, Hindenburg alleged that the chief of the Indian markets regulator, who was investigating the group after the Hindenburg report, previously held investments in offshore funds also used by the Adani Group.

The regulator said investigations into the allegations against Adani Group were completed in almost all matters, and that the chief had made relevant disclosures. REUTERS