- Monday, March 10, 2025
Adani has been charged in two separate cases – the US Department of Justice in a New York court for bribery and Securities and Exchange Commission for violating anti-fraud provisions
By: Shajil Kumar
BILLIONAIRE Indian industrialist Gautam Adani has been charged with paying hundreds of millions of dollars of bribes and hiding the payments from investors, US prosecutors said on Wednesday.
With a business empire spanning coal, airports, cement and media, the chairman of Adani Group has been rocked in recent years by corporate fraud allegations and a stock crash.
The close acolyte of prime minister Narendra Modi is alleged to have agreed to pay more than $250 million (£197.84m) in bribes to Indian officials for lucrative solar energy supply contracts.
The deals were projected to generate more than $2 billion (£1.58bn) in profits after tax, over roughly 20 years.
Adani has been charged with bribery and securities fraud in two separate cases brought by US authorities – a criminal indictment by the US Department of Justice in a New York court that charges him and seven others, including his nephew Sagar, with paying bribes to unidentified officials of state governments like those in Andhra Pradesh to buy expensive solar power.
New Delhi-headquartered Azure Power too was part of the alleged bribery scheme, according to the suit.
Separately, the US Securities and Exchange Commission also charged Gautam and Sagar Adani and an Azure Power executive with “violating the anti-fraud provisions of the federal securities laws”.
None of the multiple defendants in the case, including Adani, are in custody, the prosecutor’s office told AFP.
Prosecutors say one of Adani’s alleged accomplices meticulously tracked bribe payments, using his phone to log the bungs offered to officials.
“This indictment alleges schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice,” said Deputy Assistant Attorney General Lisa Miller.
‘Fear of reprisal’
“Gautam Adani and seven other business executives allegedly bribed the Indian government to finance lucrative contracts designed to benefit their businesses… while still other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government’s investigation,” said the FBI’s James Dennehy.
A self-described introvert, Adani keeps a low profile and rarely speaks to the media, often sending lieutenants to front corporate events.
Adani was born in Ahmedabad, Gujarat state, to a middle-class family but dropped out of school at 16 and moved to financial capital Mumbai to find work in the city’s lucrative gem trade.
After a short stint in his brother’s plastics business, he launched the flagship family conglomerate that bears his name in 1988 by branching out into the export trade.
His big break came seven years later with a contract to build and operate a commercial shipping port in Gujarat.
Adani Group’s rapid expansion into capital-intensive businesses previously raised alarms, with Fitch subsidiary and market researcher CreditSights warning in 2022 it was “deeply over-leveraged.”
In 2023 a bombshell report from US investment firm Hindenburg Research claimed the conglomerate had engaged in a “brazen stock manipulation and accounting fraud scheme over the course of decades.”
Hindenburg said a pattern of “government leniency towards the group” stretching back decades had left investors, journalists, citizens and politicians unwilling to challenge its conduct “for fear of reprisal.”
Adani Group calls it ‘baseless’
India’s Adani Group on Thursday rejected charges made by US prosecutors that its founder Gautam Adani had paid bribes to secure lucrative government contracts.
“The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied,” the conglomerate said in a statement, adding that “all possible legal recourse will be sought”.
Wednesday’s indictment accuses Adani and multiple subordinates of paying huge sums of bribes to Indian officials for lucrative solar energy supply contracts.
The deals were projected to generate more than $2 billion in profits after tax over roughly 20 years.
“The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations,” the statement added.
“We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws.”
Shares fall
Shares of Adani Enterprises slumped 10 per cent at Thursday’s open after founder Gautam Adani was charged with bribery by US prosecutors.
The steep losses in the Adani group’s key firm was matched by heavy selling in its other key businesses, with Adani Power losing 11 per cent and Adani Energy Solutions tanking 20 per cent.
Bond sale scrapped
Adani Green Energy Ltd, the renewable energy arm of billionaire Gautam Adani’s conglomerate, on Thursday scrapped a $600 million bond issue after its promoter was charged in an alleged bribery case in the US.
The issue was over-subscribed three times. But following the allegations, the issue was scrapped.
“The United States Department of Justice and the United States Securities and Exchange Commission have issued a criminal indictment and brought a civil complaint, respectively, in the United States District Court for the Eastern District of New York, against our Board members, Gautam Adani and Sagar Adani.
“The United States Department of Justice has also included our Board member, Vneet Jaain, in such criminal indictment. In light of these developments, our subsidiaries have presently decided not to proceed with the proposed USD denominated bond offerings,” Adani Green Energy said in a stock exchange filing.
Arrest Adani: Rahul Gandhi
Leader of Opposition Rahul Gandhi on Thursday demanded an immediate arrest of Adani after the industrialist was charged in the US for alleged bribery and fraud.
Addressing a press conference in New Delhi hours after the US prosecutors charged Adani and his associates, the Congress leader said it is now pretty clear and established in the US that the businessman has broken Indian as well as American laws.
Taking a jibe at Modi’s ‘Ek hain to safe hain’ slogan, Gandhi said that as long as the prime minister and Adani are together, they are safe in India.
He said Adani should be arrested immediately and interrogated, and his “protector” and Sebi chairperson Madhabi Puri Buch should be removed from her post probed.
Gandhi further said he will raise the issue during the Winter session of Parliament beginning Monday.
He also said the demand of the opposition for a Joint Parliamentary Committee probe stands.
“I can guarantee that Adani won’t be arrested or investigated in India because the Modi government was protecting him,” Gandhi alleged.
He said investigations should cover all states, irrespective of which party was in power. (Agencies)
