Gautam Adani's indictment is credit negative for Adani Group: Moody's

Moody’s Ratings on Thursday said the indictment of Adani Group's chairman and other senior officials on bribery charges is credit negative for the group’s companies.

“Our main focus when assessing Adani Group is on the ability of the group’s companies to access capital to meet their liquidity requirements and on its governance practices,” the credit rating agency says.

This comes nine months after Moody's changed its outlook on four Adani companies including Adani Green Energy to "stable" from "negative" in February. After U.S. short seller Hindenburg Research’s report targeted Adani Group last year, Moody’s in February 2023 changed its outlook on four Adani Group companies to 'negative' from 'stable'.

Billionaire Gautam Adani, his nephew Sagar Adani and Vneet S. Jaain, managing director and CEO of Adani Green Energy, along with five other individuals was indicted in a federal court in Brooklyn, New York, for allegedly bribing Indian government officials with over $250 million to secure lucrative solar energy contracts worth billions of dollars and concealing this information it as they sought to raise capital from U.S. and international investors.

On several occasions, Gautam S. Adani personally met with an Indian government official to “advance” the bribery scheme, and the defendants held in-person meetings with each other to discuss aspects of its execution, U.S. federal prosecutors allege.

"Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain caused the Indian Energy Company and certain of its subsidiaries to raise capital on the basis of false and misleading statements in connection with (i) two U.S. dollar-denominated syndicate loans totaling more than $2 billion from lender groups comprised of international financial institutions and U.S.-based investors; and (ii) two Rule 144A bond offerings for more than $1 billion underwritten by international financial institutions, which were marketed and sold to investors in the U.S., among other places," U.S. Attorney for the Eastern District of New York says in a statement.

“Adani and other defendants also defrauded investors by raising capital on the basis of false statements about bribery and corruption, while still other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government’s investigation,” stated FBI assistant director in charge James E. Dennehy.