Indian Parliament disrupted over Adani bribery allegations, bonds fall to year’s low

India’s parliament was suspended on Monday after opposition lawmakers disrupted it and demanded a discussion on bribery allegations against the Adani Group. Adani dollar bond prices fell to their lowest in almost a year as investors and lenders weighed in on the matter.

The Indian conglomerate’s billionaire chairman, Gautam Adani, and seven other people were accused by US authorities last week of paying about $265 million in bribes to Indian government officials.

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

The charges also included making misleading statements to the public despite being informed of the US investigation in 2023.

The Adani Group has said the allegations, as well as those made by the U.S. Securities and Exchange Commission in a parallel civil case, are baseless and that it will “take all appropriate legal action.”

Indian opposition parties, which have consistently targeted Adani because of what they say is his proximity to Prime Minister Narendra Modi, had said last week that they would raise the issue in Parliament on Monday.

“As the session of Parliament begins, the first step the government must take is a detailed discussion on the Adani saga, which has the potential to tarnish India’s image on the world stage,” said Mallikarjun Kharge, chairman of the main opposition Congress Party. on X, just as the proceedings in the Senate began.

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

Jagdeep Dhankhar, India’s Vice President and Speaker of the House of Lords, said he had received 13 communications from lawmakers demanding a discussion on the Adani issue, but he could not allow them as they did not follow the rules complied.

Dhankhar asked Kharge to speak but was interrupted by lawmakers pushing for a discussion, forcing him to adjourn the chambers briefly and later for the rest of the day.

Opposition accusations against Adani

Similar scenes played out moments later in the lower house, forcing the speaker to suspend work for the day there as well.

Indian opposition parties have in the past accused Modi’s government of protecting and favoring Adani and his companies, both accusations they deny.

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

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 charges, but Modi’s Bharatiya Janata Party (BJP) has said it is up to the Adani Group to tackle and defend itself and that the law will take its course.

The disruption in parliament came as Adani dollar bond prices fell as investors reduced their exposure to the conglomerate and some bankers considered halting new lending in the wake of the indictment.

Banks and regulators have reviewed exposure to the port-to-power conglomerate following the allegations.

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

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

Most Adani shares in green

DBS Group (DBSM.SI), Singapore’s largest bank by assets, had said in early 2023 that its exposure to Adani Group was S$1.3 billion ($967 million). DBS declined to comment on a Reuters request.

Some global banks are considering temporarily halting new lending to the company after the U.S. indictment but keeping existing ones, according to several bankers Reuters spoke to, raising questions about the company’s access to future financing.

“In the near term, the US indictment is likely to limit the group’s access to financing, especially in the offshore market,” said a note from Lucror Analytics on Smartkarma.

The cash balances of the Adani portfolio companies stood at $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 for the next 28 months, Adani said in a presentation on the credit and financial performance of its group companies, which it regularly shares after quarterly results.

The crisis is the second in two years to hit the Adani group, which was accused last year by short seller Hindenburg Research of unlawfully using offshore tax havens. The company denied those claims.

In Asian trading, some of the most liquid debt, issued by Adani Ports and the Special Economic Zone (APSE.NS), fell between 1 cent and 2 cents on Monday, with a similar sell-off 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 face value since US prosecutors filed the charges last week.

Long-term Ports bonds fell on Monday, losing between 8 and 10 cents in face value due to the news.

Adani Transmission’s debt maturing in May 2036 fell 1.8 cents on Monday, marking a loss of more than 7 cents since Wednesday.

The ten listed shares of the Adani group led by Adani Enterprises (ADEL.NS) lost $27.9 billion in market value in two sessions last week after the US indictment.

On Monday, most Adani-backed stocks gave up gains from early trading, with Adani Energy Solutions (ADAI.NS) reversing price to decline around 2 percent. Eight of the 10 Adani shares were trading in the green at 0643 GMT.