Adani faces US charges: $250M bribery.
Shares in the Adani Group took a significant hit after US prosecutors accused billionaire Gautam Adani and associates of deceiving investors in a $250 million bribery scheme. The charges allege that Adani’s network manipulated financial statements and concealed vital information to secure profitable contracts, casting doubt on the conglomerate’s business ethics. Prosecutors claim the alleged misconduct targeted investors globally, eroding trust and sparking regulatory scrutiny. The revelations have shaken market confidence, with the group’s stocks experiencing sharp declines. Adani has denied the allegations, vowing to challenge the claims in court as the case intensifies scrutiny on India’s richest tycoon.
Indian billionaire Gautam Adani has been charged by US prosecutors in a case involving an alleged multi-year bribery scheme to secure lucrative contracts for his conglomerate, the Adani Group. The charges, including securities fraud, claim that Adani and seven associates offered more than $250 million in bribes to Indian officials between 2020 and 2024. The bribes allegedly secured favorable terms on solar power contracts projected to generate over $2 billion in profits.
Shares of Adani Group companies plummeted following the indictment. Adani Enterprises, the flagship entity, dropped 20%, while Adani Ports fell 16.4% on the Indian stock exchange. The allegations have reignited concerns about corporate governance and the group’s practices, following similar claims last year by US short-seller Hindenburg Research, which accused the conglomerate of accounting fraud and stock market manipulation. Adani has consistently denied any wrongdoing.
The indictment also named Sagar Adani, Gautam Adani’s nephew and an executive director at one of the group’s renewable energy firms, as a co-defendant. US prosecutors allege that Sagar played a central role in facilitating and concealing the bribery scheme. The charges further implicate three former employees of the Canadian pension fund CDPQ, accusing them of obstructing an investigation by deleting emails and providing false information to US authorities. CDPQ, a shareholder in Adani companies, stated that the employees were terminated in 2023 and confirmed its cooperation with the investigation.
The scheme reportedly relied on sophisticated methods to conceal illicit payments. According to prosecutors, the defendants documented their activities through mobile phones, PowerPoint presentations, and Excel spreadsheets, detailing strategies for paying and hiding bribes. The bribes were allegedly aimed at securing agreements for Indian government entities to purchase renewable energy at above-market rates, benefiting Adani Green Energy and Azure Power.
The US Securities and Exchange Commission (SEC) has also filed a civil lawsuit, accusing the Adani Group of misrepresenting its anti-bribery compliance program to US investors. The SEC claims that bonds issued by Adani Green Energy, which raised over $175 million from US investors as part of a larger $750 million offering, were marketed on false premises. The company allegedly misled investors by asserting that its senior management adhered to anti-corruption principles.
Adani Green Energy acknowledged the charges in a statement to the Indian stock exchange and announced the suspension of a planned $600 million bond issue. The offering had attracted bids exceeding $2 billion, but the group decided to pull it following the public disclosure of the US charges. The Adani Group announced it would reevaluate the timing of its $600 million bond issue after the US charges became public.
The accusations come at a critical time for the Adani Group, which has grown into one of India’s most prominent industrial conglomerates over the past two decades. Initially focused on ports and trading, the group has diversified into renewable energy, mining, airports, and infrastructure. Its global ventures include projects in Bangladesh, Sri Lanka, and Israel, where it operates the port of Haifa.
Adani’s close ties to Indian Prime Minister Narendra Modi, who hails from the same state of Gujarat, have drawn scrutiny. Critics, including opposition leader Rahul Gandhi, have questioned Adani’s ability to secure government contracts and called for investigations into his business practices. The Congress Party, which has long alleged undue favoritism, claimed the US indictment vindicates its demands for a parliamentary probe into the Adani Group’s dealings.
The case also raises questions about the effectiveness of India’s regulatory frameworks in curbing corporate malfeasance. While Adani’s rapid ascent has been emblematic of India’s push to involve private players in infrastructure development, the indictment casts a shadow over the group’s business integrity and its role in shaping India’s energy future.
Despite the mounting legal challenges, Gautam Adani remains defiant. His group has pledged to invest $10 billion in US energy projects, positioning itself as a key player in the India-US partnership. However, the indictment could hinder these ambitions and damage Adani’s reputation globally.
As the case unfolds, it is likely to have far-reaching implications for Adani’s business empire and investor confidence. The allegations underscore the risks of inadequate corporate governance and the potential fallout from regulatory scrutiny. Adani’s legal battle in the US may serve as a litmus test for the conglomerate’s resilience and the broader accountability of Indian corporations operating on the global stage.