Adani Group stocks slide on reports of US probe into Iranian LPG trade

Adani Group shares came under pressure on reports of a US probe into alleged Iranian LPG imports in violation of sanctions

Shares of Adani Group faced renewed pressure on reports that US prosecutors are probing Billionaire Gautam Adani's conglomerate for violating sanctions by importing liquefied petroleum gas from Iran. 

 

The flagship firm Adani Enterprises fell as much as 2.65 per cent while Adani Ports and Special Economic Zone tumbled 2.72 per cent. Its energy arm, Adani Green Energy fell 2.09 per cent while Adani Energy Solutions slipped 1.51 per cent. Adani Power and Adani Total Gas fell by 1.77 per cent and 2.22 per cent, respectively. 

 

As of 9:40 AM, Adani Enterprises and Adani Ports were down 0.98 per cent and 0.7 per cent, respectively, compared to a 0.29 per cent decline in the benchmark Nifty50. 

 

The group stocks have yet to fully recover from their sharp decline in November last year after Adani and seven others were indicted in a New York federal court for their involvement in a bribery and fraud scheme. In 2023, the group lost more than $150 billion in market value after a scathing report by short-seller Hindenburg Research. 

Adani Group's sanctions violation 

An investigation by the  Wall Street Journal found that certain tankers regularly travelling between Mundra and the Persian Gulf displayed behaviours typical of ships aiming to circumvent sanctions. US prosecutors are reviewing the activities of several LPG tankers that used to ship cargoes to Adani Enterprises, the report added. 

 

However, Adani Group "categorically denied" any sanctions evasion in a statement. ''The logistics of LPG trade are managed by well-established third-party international suppliers and logistics firms, which manage shipping in accordance with global compliance standards. The supplies are under valid contracts with the supplier having specific clauses that the product should be from non-sanctioned countries," it said.  

Adani Group bribery indictment

In November last year, US prosecutors had accused executives from the Adani Group of involvement in bribery. Authorities claimed that Adani, along with seven other individuals, including his nephew Sagar Adani, agreed to pay approximately $265 million in bribes to Indian officials. 

 

This was allegedly done to secure contracts anticipated to generate $2 billion in profits over two decades and to facilitate the construction of India’s largest solar power project. The bribery controversy also sparked concerns over Adani Group’s market and public disclosure practices.

'Adani Group now more formidable'

Just a day before the WSJ report was publised, chairman Adani said the the group emerging more resilient, formidable and unbreakable despite facing consecutive acquisitions and intense scrutiny.

 

The conglomerate will invest $15-20 billion over the next five years across businesses, he said, touting its strong balance sheet and robust business growth.

 

On the allegations by the US Department of Justice and the US SEC relating to Adani Green Energy, he said this was not the first time the conglomerate had been tested. "Nor will it be the last".