India's Adani Group has withdrawn its application for a $553 million US government-backed loan to develop a strategic port in Sri Lanka, as revealed by company filings.

The decision follows a recent indictment in New York accusing the conglomerate's billionaire founder, Gautam Adani, of misleading international investors in a bribery scheme.

Adani Ports and Special Economic Zone Ltd, a subsidiary of the group, announced on Tuesday that it had withdrawn the loan request to the United States International Development Finance Corporation (DFC) for the $700 million Colombo West International Terminal project.

The company stated that the project is "progressing well and on schedule for commissioning early next year" and will be financed through internal resources and its capital management plan.

The deep-sea terminal, located alongside a Chinese-operated facility, was initially positioned as a counterbalance to Beijing’s expanding influence in the Indian Ocean. Sri Lanka, situated on the world’s busiest shipping lane connecting the Middle East and East Asia, holds significant strategic importance.

The loan agreement with DFC, finalized last year, reflected broader geopolitical concerns, particularly fears from India and the US that China could leverage its presence at Sri Lanka’s Hambantota port for military purposes.

In light of the indictment against Adani, Sri Lanka has launched investigations into the conglomerate’s local ventures, including the port and a $442 million wind power project.

The Adani Group disclosed that it has suffered a stock market loss of nearly $55 billion following the indictment. US prosecutors allege that the founder and senior executives engaged in bribery of Indian government officials.

The group has previously faced similar challenges. In 2023, it lost $150 billion in market value after Hindenburg Research accused it of corporate fraud, marking one of the steepest financial crises in its history.

With business interests spanning coal, airports, cement, and media, the Adani Group has continued to navigate turbulent waters amidst recurring allegations of fraud and market volatility.