Bribery ‘highly unlikely’ for Adani Grp
Due to robust transparency: JP Morgan
Terming rising prices as a major challenge, Reserve Bank of India (RBI) Governor Shaktikanta Das ond the central bank in the past seven months. Over the weekend, Bloomberg reported that prosecutors from the US Attorney Office and Justice Department (DoJ) are looking at an Adani Group entity and Azure Power Global around potential bribery investigations.
The global brokerage firm said in its latest note that they looked at the legal basis of such investigations and the potential impact.
"Overall, as details are very scant and the investigation itself might not lead to any successful prosecution, with likely limited potential financial/fundamental impact, we do not make changes to our recommendations at this stage for the Adani Group. For Azure Power, we move to Neutral due to tight valuations amid the noise," said JP Morgan.
The news article highlights an Adani Group entity that was potentially involved in "paying officials in India for favorable treatment on an energy project".
"Based on the profile of USD bond issuers from the group, this could be related to Adani Green Energy. The association with Azure Power in the same article also reportedly points to this," according to the report.
Notably, there is one 12GW manufacturinglinked solar energy project that was signed by both Adani Green (8GW allocation) and Azure Power (4GW) with SECI (Solar Energy Corporation of India) in January 2020.
"This project remains under construction and does not form part of any of the Restricted Group bonds from these two entities," the report mentioned.
Overall, assuming this is related to the renewable energy project of the companies, "we believe such provisions are highly unlikely to lead to a material financial impact even if the reported investigation moves to the prosecution stage and thereupon establishment of an instance of bribery".
Adani Green says US corruption probe on unrelated third party; has no relations with co
Gautam Adani's group companies said they have not received any notice from the US Department of Justice over a potential bribery investigation, but its renewable energy firm Adani Green Energy stated it is aware of an investigation into potential violations of American anti-corruption laws by an unrelated third party. Asked by stock exchanges to comment on a media report that US prosecutors had widened their probe of the Adani group to determine if any of their group entities engaged in bribery, 10 listed companies of the conglomerate in separate filings stated that they have "not received any notice from the Department of Justice of US in respect of the allegation" and that "the report is false". Adani Green Energy Ltd, in a filing on Tuesday, said it "is aware of an investigation by the United States Department of Justice into potential violations of United States anti-corruption laws by a third party". "The company has no relationship with the said third party and is thus unable to comment on the scope of the present United States investigation that the company or any of its personnel are subject to or exposed to in connection with the company's alleged dealings with the third party," Adani Green said.