Adani stocks plunge as US SEC targets founder over fraud charges
Adani stocks plunge as US SEC targets founder over fraud charges
Adani Group shares slide after the US SEC seeks email summons to Gautam Adani amid fraud allegations, sparking a broad market downturn.
In a development tied to a long-running regulatory effort, the Adani Group's ten listed companies collectively shed more than Rs 1 lakh crore in market capitalization on Friday after news that the US SEC is moving to email-summon founder Gautam Adani and his nephew Sagar Adani in a civil case linked to alleged bribery and misconduct around power contracts in India. The SEC's civil action follows a New York indictment in November 2024 accusing Gautam Adani and several associates of orchestrating a scheme to pay more than $265 million in bribes to Indian officials to secure contracts. In late Friday filings to Indian stock exchanges, the Adani entities stressed that the SEC proceedings are civil in nature and that no charges have been brought against the group’s companies as of yet. Adani Green Energy, the group’s renewable arm, added that it is not a party to the proceedings and that no charges have been filed against it.
Investors reacted with a broad selloff across Adani-linked stocks, wiping out more than Rs 1 lakh crore in value and contributing to a multi-billion-dollar decline in market capitalization, with some notes suggesting the group’s market value fell by over $9 billion. The Economic Times reported intraday losses of up to around 14% on Friday before some volatility and partial recoveries. The group attributed the stock movement to the procedural nature of SEC notices and the absence of any admission of guilt, while acknowledging the ongoing regulatory scrutiny.
The Adani Group has vowed to pursue all legal remedies, repeatedly stating that the SEC allegations are baseless. The company emphasised that it will respond to the proceedings through the appropriate channels. The SEC’s public filings argued that email service constitutes effective notice to the defendants, even as Indian authorities reportedly rejected earlier requests related to service on procedural grounds. The case continues to unfold as US prosecutors seek a jury trial and potential penalties.
Market watchers note that this marks a new phase in a saga that has already unsettled investors and raised questions about governance and cross-border enforcement. For traders in Mumbai, the immediate takeaway is heightened caution around large conglomerates facing external regulatory actions that could impact financing and operations.
