UPDATE 3-Abu Dhabi's IHC maintains outlook on Adani Group stakes as stocks rise sharply

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IHC maintains outlook on Adani investment

Adani Green clarifies Gautam Adani and others not charged under Foreign Corrupt Practice Act

Consequences mount for Adani Group after US indictment

Updates share price, Indian parliament, background; paragraphs 4,7, 11-12

- International Holding Co's (IHC) IHC.AD outlook on investments in India's Adani Group remains unchanged, the Abu Dhabi conglomerate said following the U.S. indictment of billionaire Gautam Adani, while the company's shares rose strongly for a second day on Thursday.

"Our partnership with the Adani Group reflects our confidence in their contributions to the green energy and sustainability sectors," IHC, one of the Indian business group's key foreign investors, said in a statement on Wednesday.

"As with all our investments, our team continues to evaluate relevant information and developments. At this time, our outlook on these investments remains unchanged."

Adani Green Energy ADNA.NS shares rose 10% on Thursday, hitting the cap set on gains in the stock in a single session for the second consecutive day.

Adani Energy Solutions ADAI.NS was also up the maximum 10% while Adani Total Gas ADAG.NS, which has a cap of 20%, gained about 15%.

The Adani group's stock losses have narrowed to $12.5 billion from about $34 billion, the low reached on Tuesday, following the U.S. indictments levelled last week.

Both houses of India's parliament were suspended temporarily within minutes of opening on Thursday as opposition lawmakers disrupted proceedings for the third day this week demanding a discussion on the allegations against the Adani Group, one of the biggest conglomerates in the country.

Last week, U.S. authorities accused Adani, his nephew and executive director Sagar Adani and the managing director of Adani Green ADNA.NS, Vneet S. Jaain, of being part of a scheme to pay bribes of $265 million to secure Indian power supply contracts.

Five other Adani associates were charged with conspiring to violate the Foreign Corrupt Practices Act, a U.S. anti-bribery law, and four were charged with conspiring to obstruct justice.

The ports-to-power conglomerate denied the charges as "baseless" and vowed to seek "all possible legal recourse".

The government has not commented on the allegations against the group.

Many of India's opposition parties accuse Prime Minister Narendra Modi and his Bharatiya Janata Party of favouring Gautam Adani and blocking investigations against him in India, charges both have denied.


REPERCUSSIONS MOUNT

In October last year, IHC boosted its stake in Adani Enterprises ADEL.NS to more than 5% after it sold down its investments in two other Adani companies. At the time, IHC said Adani Enterprises, the group's flagship company, was "uniquely poised to capitalise on India's robust growth journey".

The increased investment came after short seller Hindenburg Research accused the conglomerate in January last year of stock manipulation and significantly high debt levels. Adani Group denied those allegations.

Adani Green, the company at the centre of the indictment, said on Wednesday Gautam Adani had been charged in the United States for alleged violations of securities law and faced potential fines but had not been charged under the U.S. Foreign Corrupt Practices Act.

In a stock exchange filing, Adani Green said a complaint by U.S. regulator the Securities and Exchange Commission (SEC) sought "an order directing the defendants to pay civil monetary penalties (but) it does not quantify the amount of penalty".

The civil action launched by the SEC runs in parallel to U.S. federal prosecutors' indictment against Adani and others.

Repercussions from the U.S. indictments are starting to mount for the Adani Group with ratings agencies cutting some ratings and placing some of the company's bonds on a negative outlook.

French oil major TotalEnergies TTEF.PA, said on Monday it would not make any more investments in the Adani Group until there was clarity over the allegations and consequences. Total has a 20% stake in Adani Green Energy ADNA.NS and the Adani firm said there were no discussions on new investments underway.

Kenya has scrapped a $2 billion procurement project that was to give Adani control of the country's main airport and it shelved a 30-year, $736-million public-private partnership, signed by Adani Energy Solutions ADAI.NS, with its energy ministry in October.

Bangladesh is investigating power generation contracts signed under the previous prime minister, one of which was with Adani Power.

Sri Lanka said it would investigate all of the Adani-related projects in the island nation.


(Reporting by Hadeel Al Sayegh in Dubai, Chris Thomas in Bangalore, Shilpa Jamkhandikar in Mumbai and Nigam Prusty in New Delhi; Writing by Scott Murdoch; Editing by Y.P. Rajesh, Sumeet Chatterjee, Clarence Fernandez and Raju Gopalakrishnan)

((sumeet.chatterjee@thomsonreuters.com; +852 3462 7757;))

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