Subhankar Chakraborty/Hindustan Times via Getty Images
India's stock market opened lower on Thursday after one of the country's richest men was charged by US prosecutors in a massive bribery scheme.
New York prosecutors brought charges on Wednesday against Gautam Adani, one of the richest people in the world. They alleged the tycoon and seven of his senior executives paid hundreds of millions of dollars in bribes to the Indian government and hid them from US investors.
Shares of companies related to Adani, including his flagship Adani Enterprises, Adani Green Energy, and Adani Ports and Special Economic Zone Ltd., crashed 20% in under two hours of trade on Thursday.
Prosecutors said in an indictment that Adani and his executives promised more than $250 million in bribes to win solar energy contracts from the Indian government between 2020 and 2024.
In a statement on Thursday, an Adani Group spokesperson said the allegations are "baseless and denied."
"The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations," said the spokesperson.
The charges led to a sharp selloff in pre-market trading and hit the country's markets at open.
Following the news, Adani Green Energy canceled plans to raise $600 million in US dollar-denominated bonds, the company said in a statement to the National Stock Exchange of India.
The latest blow to Adani's companies came nearly two years after New York-based Hindenburg Research targeted the Adani Group in a January 2023 report, which at one point wiped out nearly $150 billion in market value from the associated companies.
Shares of Adani's companies had largely recovered from that report, but have been under pressure after the Bharatiya Janata Party — led by Prime Minister Narendra Modi — lost its majority in the lower house of India's parliament. A Modi ally, Adani is worth nearly $86 billion — making him the eighteenth-richest person in the world, per Bloomberg's billionaires index.
Stefanie Holtze-Jen, the Asia-Pacific chief investment officer for Deutsche International Private Bank, told Bloomberg TV on Thursday that the market's reaction was unsurprising.
"It has been expected now given that the news has been front and center today. I think it's already dented sentiment in the region," she said.
India's benchmark Sensex was 0.7% lower at 11:03 a.m. local time. The Nifty 50 was down 0.8%.
Adani's representatives did not respond to Business Insider's request for comment about the charges.
November 21, 2024: This story has been updated with a statement from the Adani Group.
