GQG Partners Inc (ASX: GQG) shares are having a day to forget on Thursday.
In afternoon trade, the ASX 200 stock is down 11% to $2.34.
Why is this ASX 200 stock sinking?
The catalyst for today's decline appears to have been news that Indian billionaire Gautam Adani has been charged with fraud in the United States.
According to Reuters, the chair of Indian conglomerate Adani Group has been indicted in New York over his role in an alleged multibillion-dollar bribery and fraud scheme.
U.S. prosecutors allege that Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay about US$265 million in bribes to Indian government officials to obtain contracts expected to yield US$2 billion of profit over 20 years.
It is also alleged that the Adanis and another executive at Adani Green Energy raised more than US$3 billion in loans and bonds by hiding their corruption from lenders and investors.
How does this impact GQG Partners?
The last paragraph above is the one that has investors panicking today.
Last year, GQG Partners made a significant investment in Adani and investors appear concerned what might happen to these funds.
On 2 March 2023, GQG Partners announced the completion of a US$1.87 billion investment in the Adani Portfolio companies – Adani Ports and Special Economic Zone Limited, Adani Green Energy Limited, Adani Transmission Limited and Adani Enterprises Limited.
Commenting on the investment at the time, the ASX 200 stock's CIO and chair, Rajiv Jain, said:
I am excited to have initiated positions in the Adani companies. Adani companies own and operate some of the largest and most important infrastructure assets throughout India and around the world.
Jain also praised Gautam Adani, saying:
Gautam Adani is widely regarded as among the best entrepreneurs of his generation. We believe that the long-term growth prospects for these companies are substantial, and we are pleased to be investing in companies that will help advance India's economy and energy infrastructure, including their energy transition over the long-run.
Jugeshinder (Robbie) Singh, Group CFO of Adani Group, added:
We are delighted to complete this landmark transaction with GQG. We value GQG's role as a strategic investor in our infrastructure and utility portfolio of sustainable energy, logistics and Energy Transition. This transaction marks the continued confidence of global investors in the governance, management practices and the growth of Adani Portfolio of companies.
Time will tell what happens to these investments. GQG Partners has yet to respond to the news.
