Adani bribery charges: GQG Partners says it would monitor charges, may review portfolio

 Boutique investment firm GQG Partners, led by NRI investor Rajiv Jain, has issued a statement to the Australian Exchanges regarding recent developments involving the US District Court and the SEC's actions against the Adani Group regarding an alleged bribery scheme. tners GQG Partners, which was among the initial investors to acquire a stake in the Adani Group following the Hindenburg scandal in 2023, stated that it is closely monitoring the charges brought by the US Attorney's Office for the Eastern District of New York and the US Securities and Exchange Commission against Gautam Adani and other executives and companies within the Adani Group.

Gautam Adani, the chairman of the Adani Group, has been indicted in the US on bribery and fraud charges. US prosecutors have accused Adani of deceiving investors in a large-scale solar energy project in India by failing to disclose that it was linked to an alleged bribery scheme. Adani faces charges of securities fraud, as well as conspiracy to commit securities and wire fraud.

Shares of GQG, which is listed on Australia's ASX, fell 26% this morning.

In its statement, GQG said: "We are monitoring the charges brought today by the U.S. Attorney's Office for the Eastern District of New York and the U.S. Securities and Exchange Commission against Gautam Adani and certain other Adani Group executives and companies."

GQG also added that consistent with their portfolio construction guidelines, GQG Portfolios makes diversified investments and in the aggregate, over 90% of their clients' assets are invested in issuers unrelated to the Adani Group.

"We note that consistent with our portfolio construction guidelines, GQG portfolios make diversified investments, and in the aggregate, more than 90% of our clients' assets are invested in issuers unrelated to the Adani Group," it added.

During the September quarter, GQG Partners increased its holdings in four Adani Group companies. The investment firm raised its ownership in Adani Energy Solutions, Adani Enterprises, Adani Green Energy, and Ambuja Cements. According to regulatory filings, GQG's stake in Adani Energy Solutions grew to 4.7% in the September quarter, up from 4.57% in June. Additionally, the firm expanded its positions in Adani Enterprises to 3.52%, Adani Green Energy to 4.21%, and Ambuja Cements to 2.05%.

As of the quarter that ended on September 30, GQG Partners held stakes in six Adani Group companies, which ranged between 1.5% to 2%.

Stock            GQG Stake As of September 30, 2024

Ambuja Cements    2.05%
Adani Energy Solutions    1.89%
Adani Power    1.76%
Adani Green Energy    1.62%
Adani Enterprises    1.45%
Adani Ports    1.46%

Meanwhile, a spokesperson of Adani Group denied all the allegations and termed them as "baseless".

"As stated by the US Department of Justice itself, "the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty." All possible legal recourse will be sought," Adani Group said.

"The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations. We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws," it said.