Global investment expert Mark Mobius has described the recent indictment of Adani Group officials by the US Department of Justice (DoJ) as a wasteful expenditure, suggesting that such actions may cease once President-elect Donald Trump assumes office.
Speaking to a section of media on Tuesday, Mobius, who oversees the Mobius EM Opportunities Fund focused on emerging markets, questioned the independence of the US DoJ and raised concerns about whether the indictment was politically motivated.
“I would guess that when Donald Trump takes office and whoever he appoints to lead the Justice Department, they will ask: ‘What are you doing? Why are you interfering in Indian business? Why spend all this money on a trial that will probably amount to nothing?’” Mobius remarked.
The DoJ, alongside the US Securities and Exchange Commission (SEC), recently filed an indictment and civil complaint in the New York District Court against senior Adani Group officials. However, the Indian conglomerate has strongly denied the allegations, calling them ‘baseless’ and has vowed to pursue legal avenues to defend itself.
Mobius suggested that the ongoing investigation could soon be abandoned. “There’s a good chance the Justice Department will step back from the Adani case,” he added. “There will likely be a broader restructuring of the US Justice Department, with a greater focus on domestic issues rather than foreign business matters.”
The global investor also noted that many are now realising that with Trump’s upcoming presidency, the US DoJ’s involvement in such cases may eventually dissipate.
Despite the legal challenges in the US, Mobius highlighted the resilience of Adani Group’s stocks, which have continued to perform well in the market. “While hedge funds initially targeted the Adani Group, the pressure seems to have waned,” he observed. “Investors are now recognising that, despite the challenges, the group’s business is likely to remain strong.”
Adani Group’s shares have rebounded sharply in recent days, with their market capitalisation increasing by over Rs 2 lakh crore during a three-day rally. A recent report by Bernstein also indicated that the group is in a stronger position now than it was during the Hindenburg report scandal of January 2023.
The Bernstein analysis pointed out that Adani Group is on solid ground across key financial metrics, including debt repayment, leverage, share pledges and valuations, despite the ongoing US-related developments.
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