Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
More than $20bn in market value has been wiped off Gautam Adani’s corporate empire after US corruption charges against one of India’s richest men sent shares in his businesses from ports to power plants reeling.
Adani Enterprises, the flagship of a sprawling group controlled by the businessman, closed down by more than a fifth on Thursday, shedding nearly $9bn a day after US prosecutors alleged that he hid a $265mn bribery scheme from investors and banks.
Other entities in the conglomerate shed more than $11bn in market capitalisation.
A group that has been seen as synonymous with India’s national infrastructure drive under Narendra Modi was plunged further into crisis on Thursday as Kenya tore up $2.6bn in deals due to the US indictment.
Kenyan President William Ruto said in a national address he had directed officials to “immediately cancel” a proposed $1.85bn deal for the Adani group to expand Nairobi’s international airport, and a $736mn investment in power lines.
The Kenya deals had already thrust Adani into the spotlight this year as the east African nation reeled from violent mass protests over tax rises and perceptions of opaque dealmaking by Ruto’s government.
Ruto said the cancellation was “based on new information provided by our investigative agencies and partner nations”, underlining the immediate impact of US claims that Adani personally oversaw kickbacks to Indian officials to win renewables business.
The Adani group said on Thursday that the civil and criminal cases brought by the Securities and Exchange Commission and Department of Justice were “baseless” and that it was looking at legal recourse.
The share price plunge and sharp falls in Adani company bonds on Thursday threaten to wreck the group’s planned relaunch in international markets after it appeared to overcome separate fraud allegations by Hindenburg Research, the short seller, last year.
Adani Ports and Special Economic Zone, another big listed stalwart of the group, fell more than 13 per cent on Thursday, losing $4.5bn. Listed power transmission and renewables businesses also fell by a fifth.
Trafigura, the trading house, also said on Thursday that one of its employees would step back after he was accused of facilitating the alleged bribes when he was a managing director of a Canadian pension fund investor in the Adani group.
The Securities and Exchange Commission charged Cyril Cabanes, a French citizen residing in Singapore, with participating in the bribery scheme and violating the Foreign Corrupt Practices Act.
Cabanes joined Trafigura earlier this year as chief executive of MorGen Energy, a hydrogen developer that is majority-owned by the trader.
Trafigura said that Cabanes would “step back from his day-to-day responsibilities” while it reviewed the matter. “Neither MorGen Energy nor any Trafigura Group company is a party to these proceedings,” it added.
Cabanes was a managing director at Canada’s CDPQ, an Adani shareholder, from 2016 to 2023. CDPQ has said it is co-operating with US authorities and sacked the employees named in the indictment last year.
Cabanes did not immediately respond to a request for comment.
Source link
