The Adani Group is facing a deepening crisis following bribery allegations in the US, leading to significant political fallout in India and a major investment freeze by its French partner, TotalEnergies. Parliamentary proceedings in India were disrupted on Monday as opposition lawmakers demanded a debate on the accusations levelled against the conglomerate's chairman, Gautam Adani. Meanwhile, TotalEnergies announced it would suspend further financial contributions to its joint ventures with the Adani Group, citing a lack of prior notification regarding the ongoing US investigation.
Last week, US authorities indicted Adani, along with seven others, on charges of paying approximately $265 million in bribes to secure lucrative Indian government contracts. These contracts, it is alleged, were projected to yield $2 billion in profit over two decades and included the development of India's largest solar power project. The indictment also alleges misleading public statements were made despite knowledge of the US investigation, dating back to 2023.
The Adani Group vehemently denies these accusations, describing them as baseless and stating its intention to pursue all available legal avenues. However, the unfolding events have sent shockwaves through the groupâs operations and significantly impacted its share price.
TotalEnergies, a major partner holding a 20% stake in Adani Green Energy Ltd and involved in other joint ventures, issued a statement on Monday outlining its decision to halt further investments. The company stated that until the bribery allegations and their ramifications are clarified, no new financial contributions will be made to the Adani Group. TotalEnergies emphasised its zero-tolerance policy towards corruption, highlighting its lack of awareness regarding the US investigation.
This announcement triggered a sharp decline in Adani Green Energy shares, falling over 11% initially before recovering slightly to close 7.9% lower. Adani Total Gas also experienced a 1.4% drop. The impact extended beyond the Indian stock market. In Kenya, President William Ruto cancelled a tender that was expected to grant Adani control of the country's main airport. Furthermore, a Bangladeshi panel reviewing power generation contracts, including one with Adani Power, urged the government to commission an independent, transparent investigation into past dealings.
The political ramifications in India were equally significant. Opposition parties, long critical of Adani's close ties to Prime Minister Narendra Modi, disrupted both houses of parliament, demanding a full debate on the allegations. Mallikarjun Kharge, president of the Indian National Congress, called for a comprehensive discussion to prevent damage to India's international reputation. However, the Vice President and Chairman of the Rajya Sabha (upper house), Jagdeep Dhankhar, suspended the session, citing procedural irregularities in the opposition's requests.
This latest crisis follows a similar episode last year when Hindenburg Research accused the Adani Group of improper use of offshore tax havens â accusations the company also refuted. The current situation has prompted a reassessment of the group's financial standing by banks and regulators. Several global banks are reportedly considering a temporary halt to new credit lines, though existing loans remain unaffected. The turmoil has also impacted the group's dollar bond prices, with investors reducing their exposure. In Asian trading, some Adani Ports and Special Economic Zone and Adani Transmission debt securities fell by 1 to 2 cents.
The Adani Group's 10 listed companies experienced a combined market value loss of approximately $28 billion in the two sessions following the US indictment. On Monday, several key stocks, including Adani Green, Adani Energy, and Adani Power, saw declines ranging from 3.5% to 9%. The future remains uncertain for the Adani Group as it navigates these serious allegations and their cascading consequences across its global operations.
