After the legal trouble for key members of the Adani Group surfaced in the United States, the shares of Adani group today (November 21) witnessed a massive drop. The shares of Adani Green Energy nosedived by a staggering 17.89 per cent on Thursday, falling to Rs 1,159.90 during mid-day trading.
Investors across the board reacted strongly to the news, with shares of other Adani Group companies also witnessing significant declines including the shares of Adani Enterprises and Adani Transmission.
Share performance - NSE |
What Triggered the Market Sell-off?
The sharp drop in Adani Green Energy's stock price came after US prosecutors filed criminal charges against Gautam Adani, the billionaire chair of the Adani Group, and two other board members - Sagar Adani and Vneet Jaain.
The accusations revolve around a USD 250 million bribery scheme involving the conglomerate.
Image used for representational purposes only | Adani Group
Adding to the blow, the US Securities and Exchange Commission (SEC) also initiated civil proceedings against Gautam Adani and Sagar Adani, further intensifying the group's legal woes. Both cases are being heard in the US District Court for the Eastern District of New York.
Impact on Fundraising Plans
Amid the turmoil, Adani Green Energy announced its decision to put on hold a USD 600 million fundraising plan through US dollar-denominated bonds.
The company issued a statement confirming that its subsidiaries had opted to suspend the bond sale in light of the ongoing legal developments.
"The United States Department of Justice and the United States Securities and Exchange Commission have issued a criminal indictment and brought a civil complaint, respectively, in the United States District Court for the Eastern District of New York, against our Board members, Gautam Adani and Sagar Adani. The United States Department of Justice have also included our Board member, Vneet Jaain, in such criminal indictment," Adani Green Energy said in the exchange filing.
"In light of these developments, our subsidiaries have presently decided not to proceed with the proposed USD denominated bond offerings," added the company in the regulatory filing.
The Charges - Allegations and Presumptions
The recent allegations have significantly imapcted Adani group companies with their stocks bleeding red in the stock markets. In the recent development to the Adani Saga, the US Department of Justice (DOJ) alleges that the Adani Group was involved in a USD 250 million bribery scheme.
Although, the legal proceedings are still in the early stages, and the charges remain allegations until proven in court.
