NEW DELHI (AP) – Indian billionaire Gautam Adani, one of Asia’s richest men, may be facing his biggest challenge yet as he is indicted by U.S. prosecutors on fraud and bribery charges. I don’t know. However, it is unclear how this incident will affect his business and his future, as well as the Indian economy and government.
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Shares in some companies in the Adani group began to recover on Friday after plunging the previous day following the announcement of the charges in New York. The stock prices of six of his 10 listed companies rose slightly, from 1% to nearly 4%.
Adani, considered a major Indian power figure and close to Prime Minister Narendra Modi, was indicted Wednesday in a Brooklyn, New York, court on charges of securities fraud and conspiracy to commit securities fraud and wire fraud.
The test for the tycoon and his multibillion-dollar empire, which produces everything from energy to ports to media to agriculture, is a challenge for the 62-year-old founder and his vast business empire, which in its early years had a market of more than $60 billion. It comes immediately after recovering from a loss of value. In 2023, following allegations of stock price manipulation and fraud by short-seller Hindenburg Research.
Questions have also been raised about corporate governance and crony capitalism in India’s economy, which Prime Minister Modi has vowed to make India the third largest in the world, and increased scrutiny of the huge influence of large family-run conglomerates. are. Asia’s richest person is another Indian billionaire, Mukesh Ambani of Reliance Industries.
Prosecutors allege that Adani defrauded investors by concealing that a large solar power project in India was facilitated by bribes. Seven other executives connected to Adani’s vast business empire have also been indicted. The indictment outlines a scheme to pay approximately $265 million in bribes to Indian government officials.
Adani Group has denied the allegations against the directors of its renewable energy unit, Adani Green Energy, as “baseless” and said it will pursue legal action. Shares in Adani’s green energy venture, which is at the center of the case, fell 8% on Friday.
No one charged in the case has been arrested.
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“For Adani, this is a huge blow no matter how you look at it. His public relations campaign has been in full swing for almost two years trying to repair his image in the wake of the Hindenburg scandal. This indictment is like a bolt out of the blue. It immediately reversed all of his recent progress in reclaiming his reputation and business empire,” said Michael Kugelman, director of the Wilson Center’s South Asia Institute.
Mr. Adani’s influence on the Indian economy as a whole is profound. He is the country’s largest coal mine and infrastructure developer, operates multiple ports and airports and employs tens of thousands of people. Despite Adani’s fossil fuel roots, it has ambitions to become the world’s largest renewable energy company by 2030.
Analysts say a key factor in his meteoric rise over the years is his knack for investing in key industries such as renewable energy, defense and agriculture, and for aligning the group’s priorities with those of the Modi government. It points out that it was. Before Mr. Modi, Mr. Adani was friendly with other political parties in power.
The controversy is likely to put Prime Minister Narendra Modi’s Bharatiya Janata Party-led government, which is seen as close to Adani, in trouble. In a post on It was interpreted as an expression of support for the Adani Group.
The main opposition parties seized on the controversy, demanding Mr. Adani’s arrest and accusing him of defending Mr. Modi, who at times used Adani planes to campaign. Opposition lawmakers are likely to increase pressure on Mr. Modi when the winter parliamentary session begins next week.
The controversy is already impacting Mr. Adani’s interests abroad. Kenya’s president has canceled a multi-million dollar contract with Adani Group for airport modernization and energy projects. Mr. Adani is also likely to face increased scrutiny in Bangladesh, where a court on Tuesday ordered an investigation into the energy project.
His problems could complicate India’s relations with other countries, including Sri Lanka, where New Delhi is competing with rival Beijing for strategically important markets.
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Kugelman said there is no doubt that this is “bad timing for New Delhi” and comes “at a time when it is trying to take advantage of the business community’s desire to move production out of China and find alternative investment destinations.” He said there was.
Some analysts believe that President-elect Donald Trump may intervene in India-US relations.
“India would like nothing more than to end the investigation once Trump becomes president, which is unlikely. However, Trump has a positive view of businessman Adani, who is an ardent admirer of Trump. “It’s possible,” Kugelman said.
While the case highlights business risks in India, experts believe the impact on investors will be primarily limited to the Adani group.
“There is no fear of financial contagion. For now, the impact is concentrated on the group rather than the market. Group expansion and growth may slow as Adani’s financing becomes more difficult,” the Independent said. said market analyst Ambaresh Baliga.
Still, for many in India, the news is not all that surprising. Investors already “know how ingrained this (bribery and corruption) is in the fabric of the Indian economy. We can’t afford to overlook that,” Baliga said. “Initially, investors may stay away for a while, but eventually they will come back (to Adani). This is not a small or medium-sized group that they can ignore.”
