Billionaire Gautam Adani indicted in New York for bribery

New York/New Delhi
CNN
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Indian billionaire Gautam Adani and other executives were indicted in New York on Wednesday by US prosecutors for their alleged roles in a multi-billion dollar fraud scheme involving plans to develop a major solar power plant.

The Department of Justice (DOJ) said in a statement that Adani, a key ally of Indian Prime Minister Narendra Modi, and seven other executives, including his nephew Sagar Adani, promised more than $250 million in bribes to Indian government officials to secure solar power contracts.

The impact of the allegations, which come more than a year after a US short seller accused Adani Group of stock manipulation and accounting fraud, was immediately felt at the sprawling conglomerate. On Thursday, the shares in the group’s listed companies fell between 10% and 20%.

It has also created political waves inside India with the Indian National Congress, a rival to Modi ruling Bharatiya Janata Party, which is renewing calls for a parliamentary inquiry into Adani’s companies.

The DOJ alleges that the solar supply contracts were expected to generate more than $2 billion in after-tax profits over an approximately 20-year period.

Authorities say Adani, 62, personally met with an Indian official to “promote” the scheme, which took place between 2020 and 2024. The defendants met frequently and allegedly discussed the bribery scheme, including evidence on multiple phones.

“This indictment alleges schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice,” Deputy Attorney General Lisa Miller said in the statement.

“These offenses were allegedly committed by executives and directors to obtain and finance massive government energy supply contracts through corruption and fraud at the expense of American investors,” she added.

Adani, the founder of his eponymous group worth more than $85 billion, is Asia’s second-richest person behind compatriot Mukesh Ambani, according to Bloomberg Billionaires Index.

In a letter to India’s two main stock exchanges, Adani Green, which is building the world’s largest energy plant on the outskirts of western India, acknowledged the separate criminal and civil charges brought by US officials.

“In light of these developments, our subsidiaries have decided at this time not to proceed with the proposed USD-denominated bond offering,” it said. Reuters reported that the bond sale was worth $600 million.

CNN has reached out to the Adani Group and India’s Ministry of External Affairs for comment.

Cell phones and Excel sheets

US authorities said Adani and his associates tried to hide the alleged bribery schemes from US investors “to obtain financing, including to finance the solar power supply contracts procured through bribery.”

They referred to documentation including a cell phone for extensive tracking of specific details of bribes, a photograph of a document summarizing various bribe amounts, and PowerPoint and Excel analyzes “summarizing various options for paying and concealing bribe payments.”

In a parallel civil action, Securities and Exchange Commission also charged both Adanis (as executives of Adani Green Energy Ltd) and Cyril Cabanes, an executive of Azure Power Global, with the bribery scheme, which the SEC said allowed both companies to take advantage of a lucrative contract from the Indian government. The SEC said Adani Green raised more than $175 million from US investors because of these misrepresentations.

For more than a year, Adani Group has been trying to restore its reputation following allegations made in January 2023 by US short-seller Hindenburg Research of a “brazen stock manipulation and accounting fraud scheme. The billionaire’s fortune, which at one point in 2022 was worth more than Jeff Bezos , plummeted over $80 billion after the report.

In its investigation, which Hindenburg said took two years to prepare, the US firm had questioned the “skyrocketing valuations” of Adani companies, saying their “substantial debt” put the entire group “on a precarious financial footing.” ” Short sellers make money by betting that a company’s stock will fall.

The Adani group published a 400-page rebuttal calling the Hindenburg analysis “nothing but a lie.”

Adani began his career in diamond trading. He established a commodity trading business in 1988, which later evolved into Adani Enterprises, and he now owns companies in key sectors ranging from ports and power to media and clean energy.