Shares of GQG Partners, which is one of the biggest backers of the Adani group, plunged 20% on Thursday after a U.S. federal court pressed charges against billionaire tycoon Gautam Adani and others. Rajeev Jain-led GQG Partners, however, tried to assuage the fears, releasing a statement saying that more than 90% of its clients’ assets are invested in issuers "unrelated" to the Adani Group.
"We are monitoring the charges brought today by the US Attorney’s Office for the Eastern District of New York and the US Securities and Exchange Commission against Gautam Adani and certain other Adani Group executives and companies. Our team is reviewing the emerging details and determining what, if any, actions for our portfolios are appropriate. We note that, consistent with our portfolio construction guidelines, GQG portfolios make diversified investments, and in aggregate, in excess of 90% of our clients’ assets are invested in issuers unrelated to the Adani Group," GQG says in a filing on the Australian Stock Exchange (ASX Code: GQG).
The company stock, however, took a hit as the scrip plunged 20%, taking its m-cap down to $7.79 billion.
The U.S.-headquartered global investment boutique manages assets worth US$159.4 billion for investors that include many large pension funds, sovereign funds, wealth management firms, and other financial institutions around the world. GQG Partners was one of the prominent backers of the Adani Group after the U.S.-based short-seller Hindenburg Research had come up with a scathing report on the multi-billion dollar group.
in 2023, GQG Partners had allocated around one-fifth of its Emerging Markets Equity Fund to Adani group firms, which as per LSEG data, translates into a combined stake of 19.37% in the group. The Rajiv Jain-led firm has estimatedly infused around ₹80,000 crore in Adani Group companies, including Adani Ports, Adani Green Energy, and Adani Enterprises.
All about the indictment in the U.S. court
A five-count criminal indictment was unsealed in federal court in Brooklyn charging Gautam Adani, his nephew Sagar Adani and Vineet S. Jaain, managing director and CEO of Adani Green Energy, along with five other individuals for their alleged roles in the bribery scheme and lying about it as they sought to raise capital from U.S. and international investors. Between 2020 and 2024, the defendants agreed to pay more than $250 million in bribes to Indian government officials to obtain lucrative solar energy supply contracts with the Indian government, which were projected to generate more than $2 billion in profits after tax over an approximately 20-year period, say U.S. prosecutors.
Separately, the U.S. Securities and Exchange Commission (SEC) also charged Gautam Adani and his nephew Sagar Adani for an alleged bribery plot that involved paying or promising to pay the equivalent of hundreds of millions of dollars in bribes to Indian government officials to secure their commitment to purchase energy at above-market rates that would benefit Adani Green and Azure Power. SEC also charged Cyril Cabanes, a former member of Azure Power’s board, with Foreign Corrupt Practices Act (FCPA) violations for his role in the alleged bribery scheme. According to the SEC’s complaint, Cabanes allegedly facilitated the authorisation of bribes in furtherance of the scheme while in the United States and abroad.
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