Adani Shares On November 22; Why Kenya Cancelled $2.5 Billion Deal With Adani Group?

Adani Group shares: The woes in Adani Group continue to intensify and the latest setback will be the Kenya government cancelling the whopping $2.5 billion deal with the port-to-power conglomerate. The reason is Gautam Adani, the second richest man in India, who is at the heart of controversy with allegations of bribery cases and fraud in the USA. Following this, Adani Group stocks continue to be restless on Friday, November 22, extending their fall.

Why Kenya Cancelled $2.5 Billion Deal With Adani Group?

On November 21, Kenyan President William Ruta ordered the cancellation of two deals, taking the total value to more than $2.5 billion. These deals included airport, and energy mainly. Adani Group is likely to face heavy losses owing to the cancellation.

Firstly, Kenya's government ordered the cancellation of an agreement valued at about $2 billion, where Adani Group had proposed to add a second runway at Jomo Kenyatta International Airport. Also, the deal included the upgrade of the passenger terminal in exchange for a 30-year lease.

Secondly, the Kenya president also revealed that they were cancelling a separate deal of $736 million which was a public-private partnership agreement signed between Adani Group and the country's energy ministry.

While addressing the nation, Ruto said, "I have directed agencies within the Ministry of transport and the Ministry of transport and the ministry of Energy and Petroleum to immediately cancel the ongoing procurement," reported Reuters. Ruto cited new information provided by investigative agencies and partner nations, as the main reason for his decision.

Notably, on November 7, Adani Energy Solutions Global Limited., UAE, a wholly owned subsidiary of Adani Energy Solutions Limited (AESL), incorporated a wholly owned subsidiary company, "Progressive Grid Networks Limited" in Kenya. The reason for the new subsidiary is to explore new business opportunities in power transmission projects in Kenya.

Gautam Adani and seven other senior business executives are indicated in the United States of America (USA) for bribes worth $250 million to US investors. Additionally, Gautam and his nephew Sagar Adani along with others are accused of bribing Indian government officials for solar contracts. A five-count criminal indictment has been unsealed in federal court in Brooklyn.

As per the statement of the US Attorney's Office, between approximately 2020 and 2024, the accused is alleged to have bribed Indian government officials to pay more than $265 million to obtain lucrative solar energy supply contracts with the Indian government. These were projected to generate more than $2 billion in profits after tax over an approximately 20-year period (the Bribery Scheme).

The report also revealed that on many occasions Gautam 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.

It was further revealed that it was during these periods that Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain allegedly conspired to misrepresent the Indian Energy Company's anti-bribery and corruption practices and conceal the Bribery Scheme from U.S. investors and international financial institutions to obtain financing, including to fund those solar energy supply contracts procured through bribery.

However, it said, "The charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty."

Adani Group has responded to the case in the US.

The Adani Group spokesperson said, "As stated by the US Department of Justice itself, "the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty." All possible legal recourse will be sought.

"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," the spokesperson said.

Adani Group Stocks On November 22:

Except for cement stocks, all other Adani stocks continued to fall on November 22. Adani Energy Solutions is down by 5.17%, while Adani Green Energy plunged by over 6%, further Adani Ports slipped by over 27%. Also, Adani Power declined 2%, Adani Total Gas dipped by 1%, and Adani Wilmar shed over 2%. The flagship company of Adani Group, Adani Enterprises also traded lower by 3%, at the time of writing.

In the previous session, Gautam Adani's net worth nosedived by $12 billion, as per Forbes data. While after closing bell of November 21, Adani Group's market cap declined by over Rs 2.24 lakh crore.