The U.S. Securities and Exchange Commission has summoned Gautam Adani, India's second-richest man, for questioning over fraud allegations, sending shares of the conglomerate's companies tumbling up to 8% in early trading Thursday.
The summons marks a dramatic escalation of American regulatory scrutiny into the Ahmedabad-based group, which controls critical infrastructure from ports to power plants across India. Adani Group companies collectively shed ₹47,000 crore ($5.6 billion) in market value within hours, according to CNBC.
A billion people aren't a statistic - they're a billion stories. For India's 1.4 billion citizens, the Adani Group's fate matters beyond stock tickers. The conglomerate operates six of India's 12 major ports, accounts for nearly a quarter of thermal power generation, and manages Mumbai's international airport.
The SEC investigation focuses on securities fraud and market manipulation, building on November 2024 charges accusing Gautam Adani and seven others of a $250 million bribery scheme to secure solar contracts.
Adani has consistently denied allegations. The group calls charges "baseless" and vows to "vigorously defend."
But markets don't wait. Adani Green Energy fell 8.2%, Adani Ports dropped 6.4%, flagship Adani Enterprises declined 5.7%. The selloff mirrors February 2023's crisis when Hindenburg Research triggered a $150 billion wipeout.
This time, scrutiny carries federal law enforcement weight - testing India's corporate governance at the highest level. The SEC summons requires Adani to testify, potentially under oath.
For India's regulators, an awkward reckoning. While SEBI found "no regulatory failure" after Hindenburg, U.S. prosecutors have twice brought criminal charges against the same empire.
Political implications run deep. Gautam Adani's relationship with PM Narendra Modi dates to Gujarat days. Opposition parties allege proximity granted unfair contract advantages.
"This isn't about one billionaire," said Raghuram Rajan, former RBI governor. "It's about whether India's regulatory framework can maintain investor confidence in a $3.5 trillion economy."
Foreign institutional investors poured $12.4 billion into Indian equities in six months. But in 2023, Hindenburg saw $8 billion flee in one month.
For Rajesh Sharma, a Mumbai investor holding Adani Power, familiar anxiety returns. "In 2023, my holdings dropped 40% overnight. We recovered, but now this again."
India's Sensex fell 1.2% Thursday. The Adani selloff dragged broader sentiment despite representing under 4% of index weight - their infrastructure footprint makes them systemically important.
For 1.4 billion Indians whose economy increasingly depends on foreign capital, the question isn't whether one conglomerate's stocks rise or fall. It's whether India's corporate governance can meet the standards its economic ambitions demand.
