India’s Parliament dissolved over Adani bribery allegations, bonds fall to one-year low

Tom Westbrook, Yantultra Ngui and Y.P. Rajesh

SINGAPORE/NEW DELHI (Reuters) – India’s parliament was suspended on Monday after opposition lawmakers disrupted proceedings by demanding a debate on bribery allegations against Adani Group, and Adani dollar bond prices fell to near a one-year low as investors and creditors weighed in on the matter.

Last week, US authorities charged Indian conglomerate billionaire Chairman Gautam Adani and seven others with agreeing to bribe Indian government officials with about $265 million.

The charges related to alleged payments to win contracts that could generate $2 billion in profits over 20 years and to develop India’s largest solar power project.

The allegations also included making misleading statements to the public despite being made aware of the US investigation in 2023.

The Adani Group said the allegations, as well as those brought by the US Securities and Exchange Commission in a parallel civil case, were unfounded and that it would seek “all possible remedies.”

Indian opposition parties, which have consistently targeted Adani for his closeness to Prime Minister Narendra Modi, said last week they would raise the issue in Parliament when it meets on Monday.

“As the Parliament session begins, the first step the government must take is to hold a detailed discussion on the Adani saga, which has the potential to tarnish India’s image on the world stage,” wrote Mallikarjun Kharge, president of the main opposition Congress party. X, just as hearings began in the upper house of parliament.

This is the demand of the Congress-led opposition alliance as the “hard-earned investments” of tens of millions of retail investors are at stake, Kharge said.

Jagdeep Dhankhar, India’s vice president and chairman of the upper house, said he had received 13 notices from lawmakers demanding discussions on the Adani issue, but he could not allow them because they did not follow the rules.

Dhankhar asked Kharge to speak but was interrupted by legislators insisting on holding a debate, causing him to adjourn the chambers briefly and then for the rest of the day.

OPPOSITION CHARGES AGAINST ADANI

A little later, similar scenes played out in the lower house, forcing the speaker to suspend business there for the day.

Indian opposition parties have in the past accused the Modi government of protecting and supporting Adani and his businesses, both of which they deny.

Modi’s opponents say he has long ties to Adani, dating back nearly two decades when Modi was chief minister of the western state of Gujarat, to which Adani also belongs.

They accuse the government of favoring the group in business deals, accusations the government has dismissed as “wild accusations.”

The government has not commented on the indictment, but Modi’s Bharatiya Janata Party (BJP) said the Adani group must investigate and defend itself and that the law will take its course.

The parliamentary disruption came as prices for Adani’s dollar bonds fell as investors reduced their exposure to the conglomerate and some bankers considered suspending new loans following the indictment.

Following the indictments, banks and regulators are reviewing the risks posed by the port-based power generation conglomerate.

Singapore’s banking sector’s overall exposure to the Adani group is low, the Monetary Authority of Singapore said on Monday.

“Banks have put in place measures to review and manage their exposure to borrowers and counterparties,” a MAS spokesperson said in a statement.

MOST ADANI SHARES ARE IN GREEN

DBS Group, Singapore’s largest bank by assets, said in early 2023 that its investment in Adani Group was worth S$1.3 billion ($967 million). DBS declined to comment when contacted by Reuters.

Some global banks are considering temporarily stopping new loans to the company following the U.S. indictment but maintaining existing loans, according to several bankers interviewed by Reuters, raising questions about its access to future financing.

“In the short term, the US indictment is likely to limit the group’s access to funding, particularly in the offshore market,” Lucror Analytics said in a note published on Smartkarma.

Adani’s portfolio companies had cash balances of $6.33 billion as of the first half of the current fiscal year ending March 2025, the company said.

Cash balances exceed long-term debt repayments over the next 28 months, Adani said in a presentation on the credit and financial performance of its group companies, which it regularly publishes after quarterly results.

The crisis is the second in two years to hit the Adani group, which was last year accused by Hindenburg Research of misusing offshore tax havens. The company has denied these claims.

In Asian trading on Monday, some of the most liquid debt issued by Adani Ports and Special Economic Zone fell between 1 and 2 cents, with similar sales of Adani Transmission debt.

Port bonds due in 2027 fell 1.6 cents to 88.98 cents on the dollar, having lost nearly 7 cents in par value since U.S. prosecutors filed charges last week.

Long-term Ports bonds fell on Monday and lost 8 to 10 cents at face value on the news.

Adani Transmission’s debt due May 2036 fell 1.8 cents on Monday, having lost more than 7 cents since Wednesday.

The 10 shares of the Adani group, led by Adani Enterprises, lost $27.9 billion in market value in two sessions last week following the US allegations.

On Monday, most Adani-backed stocks pared gains from early trading, with Adani Energy Solutions reversing course and trading down about 2%. Eight of 10 Adani shares were trading higher at 0643 GMT.

(Reporting by Tom Westbrook and Yantultra Nguyi in Singapore and YP Rajesh in New Delhi; Additional reporting by Sethuraman NR, Sudipto Ganguly and Nigam Prasti; Writing by Scott Murdoch and YP Rajesh; Editing by Jacqueline Wong, Lincoln Feast and Michael Perry)