US SEC Adani allegations unlikely to significantly impact business: GQG

GQG Partners' exposure to Adani stands at $8.1 billion, constituting 5.2% of its total assets of $156.7 billion. GQG Partners holds stakes ranging from 1.5% to 2% in six Adani Group companies

GQG Partners, a key investor in the Adani Group, has stated that recent bribery allegations against Adani executives are not expected to have a material impact on the conglomerate’s businesses, as reported by CNBC-TV18 on Monday. The allegations, made in a US District Court indictment and by the US Securities and Exchange Commission (SEC), involve a bribery scheme to secure solar energy contracts.

 

As of November 21, GQG Partners’ exposure to Adani stood at $8.1 billion, constituting 5.2 per cent of its total assets of $156.7 billion. The firm holds stakes ranging from 1.5 per cent to 2 per cent in six Adani Group companies.  Here's all you need to know about Adani's US SEC bribery indictment

 

 

Key points made by GQG Partners in support of their claim are: 

Focus on individuals, not companies: GQG noted that the indictment targets specific employees rather than the Adani Group as a whole.

 

Allegations limited to Adani Green: The charges pertain solely to Adani Green Energy and do not implicate other Adani companies.

 

Historical precedents of such corruptions: GQG referenced global corporations and executives who have faced corruption charges without significant long-term business disruptions.

 

Long regulatory timelines: Investigations by authorities such as the SEC typically take years and often result in reduced penalties.

 

US SEC indictment against Adani Green

On November 20, the US Attorney’s Office for the Eastern District of New York unsealed a criminal indictment against Gautam Adani, his nephew Sagar Adani, and six other senior executives. The charges include securities fraud, wire fraud, and conspiracy, alleging a $250 million bribery scheme to secure solar energy contracts expected to yield $2 billion in profits.

 

The US SEC has also filed civil charges against Gautam and Sagar Adani, accusing them of violating anti-bribery laws. The SEC is seeking monetary penalties and bans on the Adanis holding officer roles in public companies.

 

The Adani Group has denied all allegations, describing them as “baseless” and affirming its adherence to governance and transparency standards.

 

However, in response to the allegation, shares of Adani Green Energy have dropped sharply, and a $600 million bond sale by an Adani renewable subsidiary has been called off. Additionally, French energy giant TotalEnergies has suspended new investments in joint ventures with Adani, citing the allegations.