Indian tycoon Adani's US indictment spooks investors; bonds fall again
Nov 22 (Reuters) -India's Adani Group bonds were under pressure for a second session Friday following billionaire founder Gautam Adani's indictment for fraud by U.S. prosecutors and arrest warrants issued for him over an alleged $265 million bribery scheme.
The group tried to assure investors it was a "law-abiding organization" and said the accusations were "baseless and denied". That did not stop its companies losing about $27 billion in market value on Thursday.
In early Asian trade on Friday, Adani companies' U.S. dollar bonds were kept under pressure, nursing heavy loss from a day earlier. Adani Ports and Special Economic Zone APSE.NS debt maturing in 2027 USY00130VS35=TE traded at 92 cents on the dollar and longer-dated maturities USY00130YV37=TE, US00652MAJ18=TE around 80 cents.
The group's India-listed shares are due to start trading on Friday at 0345 GMT.
U.S. prosecutors have charged eight people with agreeing to pay about $265 million in bribes to Indian government officials to obtain contracts that could yield $2 billion of profit over 20 years as well as to develop India's largest solar power plant project.
Gautam Adani, his nephew Sagar Adani and former Adani Green Energy ADNA.NS CEO Vneet Jaain also raised more than $3 billion in loans and bonds by hiding corruption from lenders and investors, prosecutors said.
Adani Group said on Thursday the accusations made by the U.S. Department of Justice and U.S. Securities and Exchange Commission in a parallel civil case were "baseless and denied" and that it would seek "all possible legal recourse".
"The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations.
"We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws."
Kenya on Thursday cancelled a procurement process worth nearly $2 billion that had been widely expected to award control of the country's main airport to Adani Group.
Adani Group is a major corporate presence in its home market. Still, Citigroup analysts estimated Indian banks' exposure to the group was less than 1% of total loans for most lenders.
Reporting by Scott Murdoch and Tom Westbrook; Editing by Christopher Cushing
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
