India’s Adani Group conglomerate announced on Wednesday that it had lost nearly $55 billion in market value since a U.S. Department of Justice indictment was filed against the group’s founder, Gautam Adani, and other officials last week. The indictment, released on November 20, accuses Adani and his team of orchestrating a fraud scheme that misled international investors and involved bribing Indian government officials to secure lucrative contracts.

The charges state that Adani and his associates allegedly offered, authorized, and promised bribes to Indian officials in exchange for government contracts. Adani Group, which denies the allegations, said it has lost almost $55 billion in the combined market capitalization of its 11 listed companies since the indictment.

Despite a 1.8% increase in Adani Enterprises’ stock on Wednesday, the group has seen a decline of over 20% in its market capitalization since the indictment was made public. Adani officials are only charged with securities fraud and wire fraud conspiracy, and the group denied any bribery or corruption charges against Gautam Adani and his nephew, Sagar Adani.

Gautam Adani, a close ally of Indian Prime Minister Narendra Modi, was once the second-richest person in the world. However, his relationship with Modi has long drawn criticism, with some accusing him of benefiting improperly from their connection.

Impact and Global Repercussions

The charges have led to significant consequences for the Adani Group, including international project cancellations and negative impacts on financial markets. In Kenya, President William Ruto announced that Adani Group would no longer be involved in major projects, such as expanding the country’s electricity network and a $1.85 billion investment in Jomo Kenyatta airport. In Sri Lanka, investigations were launched into Adani Group's local investments, including a $442 million wind power deal and a deep-sea port terminal project in Colombo estimated at more than $700 million.

The Adani Group has a diversified business empire spanning coal, airports, cement, and media. This is not the first time the conglomerate has faced fraud allegations. In 2023, Adani saw $150 billion wiped from its market value after a report by short-seller Hindenburg Research, accusing the group of corporate fraud. Adani rejected the allegations, describing them as a deliberate attempt to damage the company’s reputation.

Adani’s rapid expansion into capital-intensive industries has raised concerns in the past. In 2022, a report by CreditSights, a Fitch subsidiary, warned that the group was “deeply over-leveraged”.

Adani, born into a middle-class family in Ahmedabad, Gujarat, dropped out of school at 16 and moved to Mumbai to seek work in the gem trade. He later joined his brother’s plastics business before founding the Adani Group in 1988, initially focusing on export trade. Over the years, his conglomerate expanded into various sectors, making him one of the wealthiest individuals in India and internationally.