The Adani Group is facing escalating challenges after being criminally indicted by a US federal court last week on corruption charges. This has led investors and partners to reassess their relationships with the conglomerate, which is the largest operator of ports and airports, as well as the largest private power producer in India. These developments will have serious implications not only for the group’s international expansion but also for funding its ongoing domestic projects, as domestic banks are now growing increasingly concerned.
In further bad news for the Ahmedabad-based conglomerate, its largest foreign investor, France’s Total Energies, announced on Monday that it will halt any new financial contributions to Adani Group companies. Meanwhile, the US International Development Finance Corporation (DFC), which had an agreement to lend over $550 million to a Sri Lankan port development project backed by the group, stated it would reassess the Adani project in Sri Lanka.
In a statement issued on Monday, Total Energies said: "Until such time as the accusations against Adani Group individuals and their consequences have been clarified, we will not make any new financial contributions as part of our investments in Adani Group companies." The French oil major, however, rejected any allegations of corruption in its association with Adani.
Kenya was the first country to act in response to the indictment, canceling a billion-dollar airport development deal in Nairobi, along with a $800 million power transmission project. Even in neighboring Bangladesh, where the company has ongoing projects, the crisis-ridden government has appointed an expert to review the power purchase agreement it signed with Adani Power under the now-ousted Hasina government. Down south, before the US DFC’s decision to review funding, Sri Lanka’s new left-leaning government also announced a review of its ongoing projects with the Adani Group.
A rare bit of good news for Adani comes from private equity firm GQG Partners, which had already weathered the storm after the Hindenburg report accused the group of stock manipulation and round-tripping in January 2023. GQG reaffirmed its support for Adani on Monday, stating that it "is firmly behind the Adani Group," but added a caveat: it would continue to "remain diligent in re-underwriting its positions and examining any new facts."
On November 20, a New York federal court indicted Adani Group chairman Gautam Adani, his nephew who heads Adani Green, and six other key business associates on allegations of corruption exceeding Rs 2,000 crore. The charges relate to the alleged manipulation of solar contracts in India and failing to disclose an ongoing US investigation to American investors and regulators while accessing the US debt market.