Indian businessman and billionaire Gautam Adani has been charged in the US over a $250 million bribery scheme, threatening to throw his conglomerate back into turmoil just as it rebounded from fraud allegations.
US Federal prosecutors alleged on Wednesday that Mr Adani, one of the world’s richest people, and seven other defendants, including his nephew Sagar Adani, promised to pay more than $250 million in bribes to Indian government officials to win solar energy contracts, expected to yield $2 billion of profit over 20 years. They also allegedly concealed the plan as they sought to raise money from US investors.
“The defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars,” said Breon Peace, US attorney for the Eastern District of New York, which brought the case. US law allows federal prosecutors to pursue foreign corruption allegations if they involve links to American investors or markets.
A judge has issued arrest warrants for Gautam Adani and Sagar Adani, and prosecutors plan to hand those warrants to foreign law enforcement, court records show.
In a statement on Thursday, Adani Group said that 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 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," it said.
The company also said it would provide a response to the allegations after a thorough legal review and obtaining necessary approvals from legal counsel to address matters currently under judicial review.
"We will respond in fullness of time once we review in detail the matter as presented in the legal filing. We will make a more detailed comment once we get counsel approvals to discuss what we can in public on matter that is sub judice," Adani Group's chief financial officer Jugeshinder Singh said in a post on X on Saturday.
He said that none of the group's 11 companies had faced indictment, and its issuers had not been accused of any misconduct.
Following a significant market value loss of $27 billion on Thursday due to bribery allegations, most Adani Group stocks, particularly the cement companies, recovered on Friday.
Meanwhile, Adani Green Energy also cancelled plans on Thursday to raise $600 million in US dollar-denominated bonds, according to sources. The bond had been priced but was pulled following the news.
The group’s existing US-currency notes plunged in Asian trading. The falls were the largest since a short-seller report last year by Hindenburg Research sparked a more than $150 billion rout in Adani Group stocks.
“While Adani has shown resilience in weathering past allegations, including those from Hindenburg, this development underscores the persistent risks associated with emerging markets, particularly around governance, transparency and regulatory scrutiny,” said Mohit Mirpuri, a fund manager at Singapore-based SGMC Capital.
The Adani Group operates ports, airports, power lines and motorway developments in India.
Prosecuting the case would take months, if not years, meaning that it will fall to the incoming Trump administration’s Justice Department to determine how to proceed.
Although the US and India have an extradition treaty, it’s likely that India would fight to protect its citizens from being forced to stand trial in America. If convicted, the defendants could face years behind bars, prosecutors said on Wednesday.
Beyond the Justice Department investigation, Adani has been dealing with Hindenburg claims that the conglomerate manipulated its stock price and committed accounting fraud. The group has vigorously denied those allegations and its shares climbed back from their initial plunge caused by the report.
In January, India’s Supreme Court also ruled a separate probe was not needed beyond the investigation being carried out by the country’s markets regulator, the Securities and Exchange Board of India, following Hindenburg's allegations.
Gautam Adani's fortune has also rebounded. He is the world’s 18th richest person with more than $85.5 billion, according to the Bloomberg Billionaires Index.
Obstructing justice
Prosecutors on Wednesday charged four of the eight defendants with conspiring to obstruct justice by deleting electronic evidence and lying to representatives of the Justice Department, Securities and Exchange Commission and FBI.
According to the SEC, Gautam Adani led an effort to pay or promise hundreds of millions of dollars in bribes to Indian state government officials to induce them to enter contracts that Adani Green needed to develop India’s largest solar power plant project. Another company involved in the power plant project, Azure Power Global, agreed to pay some of the bribes, the SEC alleged.
In its lawsuit, the SEC said another one of the co-defendants, Cyril Cabanes, served as a director on the board at Azure Power Global and as a representative of the company’s largest stockholder, pension fund company Caisse de Depot et Placement du Quebec, which is known as CDPQ. While serving as a director, Mr Cabanes and others “schemed” to make payments to bribe state government officials in India, the SEC said in its lawsuit.
“CDPQ is aware of charges filed in the US against certain former employees,” a representative of the pension manager said. “Those employees were all terminated in 2023 and CDPQ is co-operating with US authorities.”
US authorities ramped up an existing probe into Adani Group by looking into the conduct of the company’s billionaire founder, Bloomberg reported in March. Officials were focused on whether there were improper payments made to officials in India for favourable treatment on an energy project.
With inputs from Bloomberg and Reuters
