Following the corruption charges brought against one of India’s richest men, Gautam Adani by the US government, Adani’s business empire has lost $20bn in shares.
Loss of Share Value
On Thursday, Adani Enterprises, the flagship of the businessman’s group, closed down by more than a fifth, shedding nearly $9bn a day after US prosecutors alleged that he hid a $265mn bribery scheme from investors and banks. Other companies in the conglomerate also lost $11bn in market capitalization.
Adani Ports and Special Economic Zone, another big listed stalwart of the group, fell more than 13 percent on Thursday, losing $4.5bn. Listed power transmission and renewables businesses also fell by a fifth.
This drop in share value is partly due to Kenya pulling the plug on a $2.6bn energy and airport deal it had with the company following the US indictment.
Kenyan Deals
Kenyan President William Ruto had in a national address revealed he has 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 put Adani in the spotlight this year as the East African nation reeled from violent mass protests over tax rises and perceptions of burdensome dealmaking by Ruto’s government.
Impact of Share Value Loss
The share price plunge and sharp falls in Adani company bonds on Thursday threatened 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.