Share prices in the Adani Group fell about 20% in a day, roughly $30 billion in value, after US prosecutors unsealed a 54-page indictment against its founder. They clawed some of that back afterward. The Adani Group says the allegations are baseless.
The case, brought in federal court in Brooklyn, charges Gautam Adani, 62, his nephew Sagar Adani and Vneet S. Jaain, managing director and CEO of Adani Green Energy, along with five other individuals. It has five counts. Prosecutors allege that between 2020 and 2024 the defendants agreed to pay more than $250 million in bribes to Indian government officials to win solar energy supply contracts, which were projected to bring in more than $2 billion in after-tax profit over about 20 years.
The bribery allegations
Adani, the indictment says, met an Indian government official in person on several occasions to “advance” the scheme, and the defendants met each other to discuss how to carry it out. They talked it over on a messaging app and kept records. Prosecutors say Sagar Adani tracked the bribes offered and promised on his phone, Jaain photographed a document listing bribe amounts, and another defendant, Rupesh Agarwal, built PowerPoint and Excel analyses of ways to pay and hide the money.
The fraud charges concern money raised abroad. According to the US Attorney’s office, the Indian energy company and its subsidiaries raised capital on false and misleading statements: two US dollar syndicated loans totaling more than $2 billion from lender groups that included international banks and US-based investors, and two Rule 144A bond offerings of more than $1 billion that were marketed to investors in the US, among other places.
Four other defendants, Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra and Rupesh Agarwal, are accused of conspiring to obstruct the grand jury, FBI and Securities and Exchange Commission investigations.
“As alleged, 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. Lisa H. Miller of the Justice Department’s Criminal Division said prosecutors would pursue corrupt and deceptive conduct “no matter where in the world it occurs.” The FBI’s James E. Dennehy said the bureau’s mission is to expose corrupt agreements with foreign governments and protect investors.
The SEC filed a separate civil suit against Gautam Adani, Sagar Adani and Cabanes, an executive of Azure Power Global. The agency said Adani Green raised more than $175 million from US investors during the alleged scheme, and that Azure Power’s stock traded on the New York Stock Exchange.
Why it matters in India
Milan Vaishnav, director of the South Asia Program at the Carnegie Endowment for International Peace, described Adani as a “national champion,” a firm seen as close to the powers that be. The group’s interests run from cement to airports to highways to digital tech. Prosecutors used the Foreign Corrupt Practices Act, which Vaishnav said makes it illegal for any company doing business in the US to give or take bribes abroad.
Adani has a close relationship with Prime Minister Narendra Modi. Michael Kugelman of the Wilson Center said Modi has friendship with Adani that he would not want to jeopardize, given how significant a player the tycoon is. Kugelman did not expect the indictment to dent American interest in India, which he called an attractive investment destination as the fastest-growing major economy in the world.
Adani has been here before. Less than two years earlier, the New York firm Hindenburg Research accused the conglomerate of stock manipulation and corporate fraud, and the group came through. Analysts told NPR that the indictment and the SEC suit could make a comeback harder this time.
Sources
- Indian billionaire Gautam Adani indicted in bribery scheme involving solar power
- Gautam Adani indicted in U.S. for alleged bribery scheme
- Gautam Adani
