Indian Tycoon Gautam Adani Faces US Indictment Over Alleged $250 Million Bribery Scandal

Gautam Adani, the Indian billionaire and head of the Adani Group, has been indicted by US prosecutors in a bribery case involving $250 million aimed at securing profitable solar contracts in India. The repercussions are significant, with shares of his companies plummeting and rising scrutiny of his business practices.

P24 News Media

November 21, 2024

1 minute

India

Indian Tycoon Gautam Adani Faces US Indictment Over Alleged $250 Million Bribery Scandal

Gautam Adani, the renowned Indian billionaire and head of the Adani Group, finds himself embroiled in a serious legal battle as US prosecutors have charged him with involvement in an alleged bribery scheme totaling over $250 million. This scheme reportedly spans several years, with accusations that Adani and his associates engaged in corrupt practices to secure favorable terms on solar power contracts, which were anticipated to yield profits exceeding $2 billion.

The announcement of the indictment has had immediate financial repercussions, with shares in Adani Group companies taking a significant downturn. Following the news, Adani Enterprises, the flagship company of the conglomerate, witnessed a staggering drop of 20 percent in value, while its ports business plummeted by 16.4 percent. This downturn symbolizes the increasing investor concern regarding the integrity of Adani's business dealings.

In addition to Gautam Adani, seven others have been indicted alongside him, including various executives from Adani’s energy subsidiaries and former employees of a Canadian pension fund. Notably, Sagar Adani, Gautam's nephew and executive director at one of the renewable energy firms, is also implicated in this case.

The prosecutors allege that more than $250 million in bribes were offered and promised between 2020 and 2024 to officials within the Indian government. This alleged bribery scheme was said to be hidden from US financial institutions and investors while they raised substantial funds. The US Attorney’s Office in Brooklyn has asserted that Gautam Adani himself met with Indian officials to facilitate this illicit scheme.

Moreover, three former employees of the Canadian pension fund CDPQ have also been charged in relation to the case, accused of obstructing a federal investigation by deleting incriminating emails and misinforming the US government. As a significant shareholder in Adani companies, CDPQ has stated that it is collaborating with US authorities in this investigation.

This indictment represents yet another blow to Adani Group's reputation, which has recently been navigating through allegations of accounting fraud and stock market manipulation initiated by US short seller Hindenburg Research. Adani has consistently denied any claims of wrongdoing and maintains his innocence.

In a statement, US Deputy Assistant Attorney General Lisa Miller emphasized the gravity of the accusations, stating, “This indictment alleges schemes to pay over $250 million in bribes to Indian government officials.” Prosecutors further asserted that the defendants meticulously documented their corrupt activities using various means, including mobile devices, PowerPoint presentations, and Excel spreadsheets.

A concurrent civil lawsuit filed by the US Securities and Exchange Commission (SEC) claims that the alleged bribery efforts were intended to secure the Indian government's commitment to purchasing energy at inflated prices, thereby benefiting Adani Green and Azure Power, two major renewable energy firms in India.

While Adani Green has publicly acknowledged the charges, it has opted to suspend a planned bond issuance that was set to attract substantial investments. This decision comes after the US allegations made headlines, prompting a reevaluation of the timing for such financial moves.

Gautam Adani has established his conglomerate as one of India’s most influential industrial groups over the past two decades, expanding from core sectors like ports and trading into diversified areas including mining, airports, coal, and renewable energy. His ventures extend beyond India, with significant infrastructure projects in nations such as Bangladesh, Sri Lanka, and Israel.

With political ties to Prime Minister Narendra Modi and a significant investment commitment to US energy security, Adani's rise in business has coincided with India's push for private-sector involvement in infrastructure development. However, this latest indictment could pose serious challenges to his continued influence and operations.

The Indian National Congress party, led by Rahul Gandhi, has renewed calls for an investigation, claiming the US indictment substantiates their demands for a comprehensive parliamentary inquiry into Adani's business practices and relationships with government entities. As the situation unfolds, it remains to be seen how the Indian government will respond to these serious allegations.