Adani stock crash: PSU bank stocks tumble after Gautam Adani indicted in US on bribery and fraud charges

Banking stocks declined on Thursday, November 21, as investor sentiment turned negative towards the sector after Adani group chairman Gautam Adani and other group executives faced charges in a $2 billion bribery scheme in the United States.

The NIFTY Bank index lost as much as 1.6% on Thursday but later staged some recovery to trade 0.3% lower at 1:30 pm. The broader NIFTY 50 index was also down 0.7% to 23,354.

US prosecutors on Wednesday alleged that the Adani Group had paid $265 million in bribes to Indian officials to secure solar energy contracts.

“In or about and between 2020 and 2024, senior executives of an Indian renewable-energy company, which was a portfolio company of an Indian conglomerate, an issuer company that operated in the renewable-energy sector whose securities were traded on the US exchange and that issuer's largest shareholder, a Canadian institutional investor, participated in a scheme to bribe Indian government officials to ensure execution of lucrative solar energy supply contracts with Indian Government entities,” the US District Court said in its order.

Following the order, the Adani Group cancelled its $600-million US bond offering on Thursday. “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 has also included our Board member, Vineet Jain, in such a criminal indictment,” Adani Green Energy informed the stock exchange in a filing.

“In light of these developments, our subsidiaries have presently decided not to proceed with the proposed USD denominated bond offerings,” it added.

Meanwhile, Adani group on Thursday denied charges of paying bribe to secure favourable terms for solar power contracts, saying the allegations by US prosecutors are baseless and the conglomerate is compliant with all laws.

"The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied," the group spokesperson said in a statement.

"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. We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws," the spokesperson added.