Adani group firms shed $12.5bn in market value after SEC seeks court nod to serve summons
The Adani Group has rejected the allegations as “baseless” and said it would pursue “all possible legal recourse” to defend itself.
Shares of India's Adani Group companies lost about $12.5 billion in market capitalisation on Friday after the US securities regulator sought court permission to personally serve summons on group founder Gautam Adani and executive Sagar Adani over alleged fraud and a $265 million bribery scheme.
The sell-off followed a filing by the US Securities and Exchange Commission (SEC), reported by Reuters on Thursday after Indian markets had closed, seeking approval to email the summons directly to the two executives.
On Friday, Adani Enterprises, the group's flagship firm, emerged as the biggest percentage loser on India's benchmark Nifty 50 index. Its shares fell 10.65% to 1,864.2 rupees, while the Nifty ended the session down 0.95%. Shares of other Adani group companies declined between 3.4% and 14.54%.
Keep updated, follow The Business Standard's Google news channel
The US indictment, unsealed in November 2024, accused Adani group executives of being part of a scheme to pay bribes to Indian officials to secure purchases of electricity produced by Adani Green Energy, a group subsidiary.
US law prohibits foreign companies that raise funds from American investors from paying bribes overseas to obtain business and from soliciting investment using false or misleading statements.
According to the SEC filing, India had previously declined two requests to serve the summons, which the regulator has been attempting to deliver since last year.
The Adani Group has rejected the allegations as "baseless" and said it would pursue "all possible legal recourse" to defend itself. It did not immediately respond to a Reuters request for comment on the latest SEC filing dated 21 January.
"Market participants assumed nothing was pending and that the group had been cleared, so the SEC filing appears to have come out of the blue," said Ambareesh Baliga, an independent market analyst.
With no clear timeline for the next steps, Baliga said the issue could linger for at least another fortnight, adding that overall market sentiment was already weak
