Shares in India's Adani Group plunge 20% after US bribery, fraud indictments

NEW DELHI (AP) — One of Asia’s richest men, controversial Indian tycoon Gautam Adani, is again in the spotlight. His companies’ stocks plunged up to 20% on Thursday after he was indicted by U.S. prosecutors on charges he duped investors in a massive solar energy project in India by concealing that it was being facilitated by an alleged bribery scheme.

In an indictment unsealed by federal prosecutors in New York on Wednesday, Adani, 62, was charged with securities fraud and conspiracy to commit securities and wire fraud.

One result of the U.S. legal action is that the Adani group decided not to proceed with a proposed U.S. dollar-denominated bond offering. Adani Renewables announced the decision in letters to the Bombay Stock Exchange and the National Stock Exchange of India.

In a statement, the group said the allegations against directors of Adani Green “are baseless and denied.” The U.S. Department of Justice said “the charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.”

Adani is the son of a middle-class family in Ahmedabad in western India’s Gujarat state. He quit college to become a diamond trader in Mumbai, India’s financial capital. In the 1980s, he started importing plastics before establishing Adani Enterprises, which traded in everything from shoes to buckets and remains his flagship company.

India opened up its economy in the 1990s and a new middle class emerged as tens of millions of people escaped poverty and the economy boomed, prompting Adani to bet on infrastructure and coal.

Adani’s first big project, the Mundra port in Gujarat, opened in 1998 and is now India’s largest. Adani Ports and Special Economic Zone Ltd. is India’s biggest private port operator. Within a decade, Adani became India’s largest developer and operator of coal mines. According to Adani Power’s website, it has expanded to Australia and Indonesia and is on track to be “one of the largest mining groups in the world.”

Adani companies, India's second-largest conglomerate, operate airports in major cities, build roads, generate electricity, manufacture defense equipment, develop agricultural drones, sell cooking oil and run a media outlet. Despite his fossil fuel roots, the billionaire Adani Green aims to become the world’s largest renewable energy player by 2030.

Adani is considered close to the Hindu nationalist government, and the political opposition has long accused Prime Minister Narendra Modi of having close ties with the tycoon. They both hail from the western state of Gujarat.

The businessman's critics say much of his success stems from his close ties to the government and Modi. For example, they have accused the government of adjusting bidding rules to make it easier for Adani to win contracts to operate airports. The company denies this, saying contracts were won relatively transparently.

Opposition Congress party leader Rahul Gandhi called for Adani’s arrest for his criminal acts in the United States and India and has accused Modi of protecting him.

India’s main opposition also demanded a parliamentary committee probe into Adani Group dealings, which Jairam Ramesh, a leader of the Congress Party, said are causing "growing monopolization in key sectors of the Indian economy, fueling inflation, and posing huge foreign policy challenges as well.”

Ramesh said his party has been "bringing out the various dimensions of these scams and the intimate nexus between the PM (Modi) and his favorite businessman. These questions have remained unanswered.”

Last year, the Adani companies lost $68 billion in market value after short-selling firm Hindenburg Research accused Adani of “pulling the largest con in corporate history,” triggering a massive sell-off of the group's stocks.

U.S.-based Hindenburg accused Adani companies of stock price manipulation and fraud just as the group began a share offering meant to raise $2.5 billion.

The Adani group dismissed Hindenburg’s allegations, saying none were “based on independent or journalistic fact finding.” Adani’s response included documents and data tables and it said the group had made all necessary regulatory disclosures and has abided by local laws.

Adani’s net worth shot up about 2,000% in recent years as share prices for his listed companies soared.

Before Modi took office, Adani was friendly with the rival Congress Party, which governed Gujarat state when many of his early projects began. Adani has been “close to every politician in power,” R N Bhaskar, a journalist who wrote a biography on Adani, told The Associated Press.

Adani’s supporters say he has cleverly aligned the group’s priorities with those of the government by investing in key industries like renewable energy, defense, and agriculture. His projects overseas, in strategically important countries like neighboring Sri Lanka, help New Delhi compete with rival Beijing in the region.

India's opposition Congress party leader Rahul Gandhi addresses the media on Indian businessman Gautam Adani, after Adani was indicted by U.S. prosecutors on charges he duped investors in a massive solar energy project in India, in New Delhi, India, Thursday, Nov. 21, 2024. Image behind shows Adani. (AP Photo/Manish Swarup)

India's opposition Congress party leader Rahul Gandhi, addresses the media on Indian businessman Gautam Adani, after Adani was indicted by U.S. prosecutors on charges he duped investors in a massive solar energy project in India, in New Delhi, India, Thursday, Nov. 21, 2024. An image of Adani is behind. (AP Photo/Manish Swarup)

FILE - India's Adani Group Chairman Gautam Adani addresses the Vibrant Gujarat Global Summit in Gandhinagar, India, Jan.10, 2024. (AP Photo/Ajit Solanki, File)

FILE- A tree with dried branches stands outside Adani Corporate House in Ahmedabad, India, Jan. 27, 2023. (AP Photo/Ajit Solanki, File)

India's opposition Congress party leader Rahul Gandhi, center, addresses the media on Indian businessman Gautam Adani, after Adani was indicted by U.S. prosecutors on charges he duped investors in a massive solar energy project in India, in New Delhi, India, Thursday, Nov. 21, 2024. Image behind shows Adani, on left with Indian Prime Minister Narendra Modi, on right. (AP Photo/Manish Swarup)

BAKU, Azerbaijan (AP) — Countries of the world took turns rejecting a new but vague draft text released early Thursday which attempts to form the spine of any deal reached at United Nations climate talks on money for developing countries to transition to clean energy and adapt to climate change.

The draft left out a crucial sticking point: how much wealthy nations will pay poor countries. A key option for the lowest amount donors are willing to pay was just a placeholder “X.” Part of that is because rich nations have yet to make an offer in negotiations.

So the host Azerbaijan presidency with its dawn-released package of proposals did manage to unite a fractured world on climate change, but it was only in their unease and outright distaste for the plan. Negotiators at the talks — known as COP29 — in Baku, are trying to close the gap between the $1.3 trillion the developing world says is needed in climate finance and the few hundred billion that negotiators say richer nations have been prepared to give.

Introducing the plan, lead negotiator Yalchin Rafiyev emphasized how balanced the plan was, but all sides kept saying it was anything but balanced and pointed time was running out.

“We would like to correct the balance. It is completely tilted,” Pakistan delegate Romina Khurshid Alam said.

Poor nations blasted both rich nations and the presidency with Honduras delegate Malcolm Bryan complaining that the plan was a "completely unbalanced text that doesn’t bring us any closer to a landing .... It is high time for developed countries put their numbers on the table.’’

The EU's climate envoy Wopke Hoekstra called the draft "imbalanced, unworkable, and not acceptable.”

In a statement, the COP29 Presidency stressed that the drafts “are not final.”

“The COP29 Presidency’s door is always open, and we welcome any bridging proposals that the parties wish to present,” the Presidency said in a statement. It added that possible numbers for a finance goal will be released in the next iteration of the draft.

COP29 President Mukhtar Babayev convened the Qurultay — a traditional Azerbaijani meeting — where negotiators spoke to hear all sides and hammer out a compromise. He said that “after hearing all views, we will outline a way forward regarding future iterations.”

Independent experts say that at least $1 trillion is needed in finance to help transition away from planet-warming fossil fuels and toward clean energy like solar and wind, better adapt to the effects of climate change and pay for losses and damages caused by extreme weather.

Esa Ainuu, from the small Pacific island of Niue said, slammed the lack of a number in the draft deal.

“For us in the Pacific, this is critical for us,” Ainuu said. “We can’t escape to the desert. We can’t escape somewhere else. This is reality for us. If finance is not bringing any positive, (then) why’re we coming to COP?”

She added: “I don’t even know if we’re going to be here for a COP 30 or COP 31. Something needs to happen.”

Adao Barbosa, a top negotiator from the Indian ocean nation of Timor-Leste said all developing countries are unhappy with the climate finance deal. As things stand, the deal is weak, Barbosa said.

Mohamed Adow, director of the think tank Power Shift Africa, expressed disappointment at the lack of a figure. “We came here to talk about money. The way you measure money is with numbers. We need a cheque but all we have right now is a blank piece of paper,” he said.

Iskander Erzini Vernoit, director of Moroccan climate think-tank Imal Initiative for Climate and Development, said he was “at a loss for words at how disappointed we are at this stage to have come this far without serious numbers on the table and serious engagement from the developed countries.”

He said that some developed nations “are slowly waking up” to the fact that keeping warming to below 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial times will require over a trillion dollars in finance. “But many are still asleep at the wheel,” he said.

There are three big parts of the issue where negotiators need to find agreement: How big the numbers are, how much is grants or loans, and who contributes.

Official observers of the talks from the International Institute of Sustainable Development who are allowed to sit in on the closed meetings reported that negotiators have now agreed on not expanding the list of countries that will contribute to global climate funds — at least at these talks. Linda Kalcher, of the think tank Strategic Partnerships, said on the question of grants or loans, the draft text suggests “the need for grants and better access to finance.”

She added that the lack of numbers in the draft text could be a “bluff.” The COP29 presidency, which prepares the texts “should know more ... than what they put on the table,” she said.

Other areas that are being negotiated include commitments to slash planet-warming fossil fuels and how to adapt to climate change. But they’ve also seen little movement.

European nations criticized the package of proposals for not being strong enough in reiterating last year’s call for a transition away from fossil fuels.

“The current text offers no progress” on efforts to cut the world’s emissions of heat-trapping gases, said Germany delegation chief Jennifer Morgan. “This cannot and must not be our response to the suffering of millions of people around the world. We must do better.”

Eamon Ryan, Ireland’s environment minister, also criticized “backsliding” on cutting fossil fuels from last year’s deal.

Associated Press journalist Ahmed Hatem contributed to this report.

The Associated Press’ climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP’s standards for working with philanthropies, a list of supporters and funded coverage areas at AP.org.

Mukhtar Babayev, COP29 President, left, and Yalchin Rafiyev, Azerbaijan's COP29 lead negotiator, speak during a plenary session at the COP29 U.N. Climate Summit, Thursday, Nov. 21, 2024, in Baku, Azerbaijan. (AP Photo/Peter Dejong)

Activists participate in a demonstration for climate finance at the COP29 U.N. Climate Summit, Thursday, Nov. 21, 2024, in Baku, Azerbaijan. (AP Photo/Sergei Grits)

Austria Climate Minister Leonore Gewessler, left, talks with Australia Climate Minister Chris Bowen before a plenary session at the COP29 U.N. Climate Summit, Thursday, Nov. 21, 2024, in Baku, Azerbaijan. (AP Photo/Peter Dejong)

Jennifer Morgan, Germany climate envoy, arrives ahead of a plenary session at the COP29 U.N. Climate Summit, Thursday, Nov. 21, 2024, in Baku, Azerbaijan. (AP Photo/Peter Dejong)

Mukhtar Babayev, COP29 President, arrives for a plenary session at the COP29 U.N. Climate Summit, Thursday, Nov. 21, 2024, in Baku, Azerbaijan. (AP Photo/Peter Dejong)

Activists participate in a demonstration for climate finance at the COP29 U.N. Climate Summit, Thursday, Nov. 21, 2024, in Baku, Azerbaijan. (AP Photo/Peter Dejong)

Panama Climate Envoy Juan Carlos Monterrey Gomez, left, and Wopke Hoekstra, EU climate commissioner, attend a session on climate targets during the COP29 U.N. Climate Summit, Thursday, Nov. 21, 2024, in Baku, Azerbaijan. (AP Photo/Sergei Grits)

Activists participate in a demonstration for climate finance at the COP29 U.N. Climate Summit, Thursday, Nov. 21, 2024, in Baku, Azerbaijan. (AP Photo/Peter Dejong)

A security person stands near a logo for the COP29 U.N. Climate Summit, Thursday, Nov. 21, 2024, in Baku, Azerbaijan. (AP Photo/Peter Dejong)

Activists participate in a demonstration for climate justice at the COP29 U.N. Climate Summit, Thursday, Nov. 21, 2024, in Baku, Azerbaijan. (AP Photo/Peter Dejong)