Rating agencies downgrading Adani companies after US SEC allegations
Global Ratings such as S&P Global, Moody’s and Fitch have downgraded the outlook for several Adani group companies citing escalating legal and governance risks. As per S&P global ratings, the indictment of Adani Group's founder by US prosecutors could renew questions over the ports-to-energy conglomerate's governance practices and damage its reputation. A US indictment of three board representatives of an unrated Adani group entity could affect investor confidence in other Adani group entities (because the founder is on the board of multiple entities within the group), thereby potentially impairing their funding access and increasing their funding costs.
Another research firm CreditSights said refinancing for Adani Group's green energy business is the biggest concern in the near term. Funding channels will inevitably squeeze across the Adani Group, with creditors likely to reduce or limit their group-wide exposure.
As per US SEC allegations, the board members are involved in a US$250 million bribery scheme related to solar power contracts in India, and that they breached the anti-bribery compliance policy through misrepresentation to investors in an offshore bond (unrated).
