How US indictment of Adani could affect India’s Modi and ruling BJP

The indictment of Indian tycoon Gautam Adani on bribery charges by US authorities has raised questions about his close ties to Prime Minister Narendra Modi and created political fodder for opposition parties ahead of key state elections, analysts say.

US prosecutors have accused Adani and his nephew of orchestrating a US$265 million scheme to bribe Indian officials to secure power-supply deals.

The explosive allegations come at a crucial time, coinciding with the tail end of state elections in Maharashtra and Jharkhand.

The charges against Adani wiped out billions of dollars in stock market trading on domestic bourses on Thursday, with Adani Group companies losing more than US$26 billion in market capitalisation. Adani Group shares extended the losses early on Friday, but later in the day made a partial recovery.

“The indictment of Adani Group’s chairman and other senior officials on bribery charges is credit negative for the group’s companies,” Moody’s Ratings said in a statement on Thursday. The ratings agency said the allegations raised concerns about the conglomerate’s governance practices and its ability to meet liquidity requirements.

Adani Group swiftly denied the allegations, calling them “baseless” and saying it would seek “all possible legal recourse” against the charges brought by the US Department of Justice and the Securities and Exchange Commission.