New Delhi: American investment firm GQG Partners, Adani Group’s biggest shareholder in the US, faced a sharp decline in its share price, tumbling as much as 23% on the Australian Securities Exchange on Thursday, November 21. The sell-off came after US federal prosecutors and the Securities and Exchange Commission filed charges against billionaire Gautam Adani and other executives of the Adani Group, alleging involvement in a $250 million bribery scheme. Adani Group has called the charges “baseless” and denied them.
GQG’s stock fell to AUD 1.98, closing the day down 20%, according to a Moneycontrol report.
The charges, filed by the US Attorney’s Office for the Eastern District of New York, allege that between 2020 and 2024, senior executives of a renewable energy company under the Adani Group orchestrated a bribery scheme. The scheme purportedly involved paying government officials to secure profitable solar energy contracts with public entities. A Canadian institutional investor, identified as the issuer’s largest shareholder, was also implicated in the alleged misconduct, according to a CNBC TV18 report.
As a significant investor in Adani Group companies, GQG Partners sought to reassure stakeholders amid growing concerns. The boutique investment firm, led by co-founder Rajiv Jain, stated it is closely monitoring the situation and reviewing its exposure to Adani stocks. GQG emphasised that over 90% of its clients’ assets are invested in companies unrelated to the Adani Group, ensuring a diversified portfolio.
Despite this reassurance, GQG’s ties to the Adani Group have drawn scrutiny. Since March 2023, GQG has increased its investments in Adani companies – including Adani Ports, Adani Green Energy, and Adani Enterprises – starting with a Rs 15,446 crore infusion and growing to nearly Rs 80,000 crore by late 2024. These investments came after allegations of financial irregularities were raised by Hindenburg Research earlier this year.
As of the quarter ending September 30, GQG Partners held stakes ranging from 1.5% to 2% in six Adani Group companies, according to a CNBC TV18 report. “Our team is reviewing the emerging details and determining what, if any, actions for our portfolios are appropriate,” a GQG statement said.
GQG Partners manages $159.4 billion in assets as of October 2024. The Adani Group’s holdings currently have a market capitalisation exceeding $200 billion, according to a Fortune report.
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Shares of Adani Group companies plummeted on Thursday following the charges. At the start of trading, stocks across the group posted losses between 10% and 20%, erasing Rs 2 lakh crore in market capitalisation.
Adani Enterprises, the group’s flagship firm, suffered a 20% drop, while Adani Ports fell 15%. Most other group companies, including Adani Green Energy and Adani Total Gas, also saw declines in the range of 10-20%. In response to the developments, Adani Green Energy announced it has canceled a planned US dollar-denominated bond sale.
