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US charges billionaire Gautam Adani in $265m bribery case

November 21, 2024, 2:56 PM

Adani Group's Gautam Adani has been accused of bribery payments to Indian government officials, something the group strongly denies

Adani Group rocked by charges
Denies bribery allegations
Gautam Adani indicted in US

US prosecutors have indicted Indian billionaire Gautam Adani and seven others, including his nephew Sagar Adani, in connection with an alleged $265 million bribery scheme tied to India’s largest solar power project. Adani has extensive business interests in the Arabian Gulf.

The indictment, unsealed in New York on Wednesday, accuses the Adanis and Vneet Jaain, a former CEO of Adani Green Energy, of paying bribes to Indian government officials to secure contracts expected to generate $2 billion in profit over 20 years.

Adani, 62, and the others also face charges of securities fraud and wire fraud conspiracy for allegedly misleading investors and lenders to raise more than $3 billion in loans and bonds.

Arrest warrants have been issued for Gautam and Sagar Adani, and US authorities plan to involve foreign law enforcement, court records show.

A spokesperson for the Adani Group rejected the allegations, calling them baseless.

“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 spokesperson said in a statement. “All possible legal recourse will be sought.”

The charges sent shockwaves through Adani Group’s listed companies, wiping $28 billion off their combined market value on Thursday. Flagship Adani Enterprises plunged 23 percent, while other companies, including Adani Green Energy, Adani Ports and Adani Total Gas, dropped between 9 and 20 percent.

Adani Green Energy also canceled plans to raise $600 million in dollar-denominated bonds, citing “recent developments”.

The indictment places scrutiny over Adani Group’s ties to the Gulf, where it has forged partnerships with major players, including Abu Dhabi’s International Holding Company and Gulf sovereign wealth funds.

In recent years the group has expanded its Gulf presence, forming joint ventures with Abu Dhabi’s Edge defence group, entering logistics agreements with AD Ports and securing investments from the Abu Dhabi Investment Authority and Qatar Investment Authority.

It was reported last month that the Adani Group, which operates seven airports in India, was in talks with a Middle East-based sovereign wealth fund to raise up to $1 billion for its airports business.

In August Adani Power also incorporated a wholly owned subsidiary in Abu Dhabi to invest in regional infrastructure and energy projects.

Vinod Adani, Gautam Adani’s elder brother, has also been linked to UAE-based offshore entities.

Emerging Market Investment DMCC, one such entity, lent $1 billion to an Adani Power subsidiary, according to a 2023 report by short-seller Hindenburg Research.

The indictment adds to the challenges facing the Adani Group, which has faced allegations of fraud and corporate misconduct.

The Hindenburg report released in early 2023 accused the conglomerate of stock manipulation and accounting fraud, claims the group has denied.

Gautam Adani, who is one of the world’s richest people, has also been accused in the report of overvaluing coal imports and misusing shell entities in jurisdictions such as the UAE, Singapore and Hong Kong.

Adani, a close ally of Indian prime minister Narendra Modi, has long faced accusations of benefiting from political ties, allegations he denies.

He recently congratulated Trump on his win and pledged $10 billion in US energy security and resilient infrastructure projects, aiming to create up to 15,000 jobs.

Donald Trump’s re-election as US president raises questions about how his administration may approach the case. Appointments to the role of US attorney are made by the president.