Gautam Adani, the Indian billionaire, faces serious allegations of fraud in the United States. Authorities have accused him of orchestrating a bribery scheme amounting to $250 million (£198 million) and of concealing this operation to secure funding in the US.
On Wednesday, criminal charges were filed in New York against 62-year-old Mr. Adani, a prominent figure among the world’s wealthiest individuals. His extensive business empire spans various sectors, including ports, airports, and renewable energy.
Prosecutors have claimed in the indictment that the tycoon and other high-ranking executives conspired to pay Indian officials to secure contracts for his renewable energy company, which is projected to generate over $2 billion in profits over the next two decades.
The Adani Group has refuted the allegations, labelling them as “baseless”.
The statement emphasised that every available legal option will be pursued.
In Thursday morning trading, shares of Adani Group companies experienced a decline exceeding 10%, resulting in a loss of over $20 billion in market capitalisation for the conglomerate. Adani Green Energy, the company embroiled in the allegations, announced it will not proceed with a $600 million bond offering.
The conglomerate has faced scrutiny since 2023, following a report from US short-seller Hindenburg Research that alleged decades of “brazen” stock manipulation and accounting fraud.
Mr Adani has denied the claims, which have led to a significant sell-off in the market and triggered an investigation by India‘s market regulator, the Securities and Exchange Board of India (Sebi).
Subsequently, Hindenburg levelled accusations against Sebi’s chief, Madhabi Puri Buch, alleging connections to offshore funds associated with the Adani group. Both Buch and the group have refuted these claims.
For months, allegations surrounding a bribery investigation into the company have been making headlines. Prosecutors revealed that US authorities’ investigation into the company began in 2022, but they encountered obstacles that hindered the inquiry.
Allegations have emerged that executives secured $3 billion through loans and bonds, including contributions from US firms, based on false and misleading statements concerning the company’s anti-bribery practices and policies, alongside reports regarding an ongoing bribery investigation.
US Attorney Breon Peace announced the charges, stating, “As alleged, the defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars and… lied about the bribery scheme as they sought to raise capital from U.S. and international investors.”
“My office is dedicated to eliminating corruption in the global marketplace and safeguarding investors from individuals who aim to profit at the cost of the integrity of our financial markets,” he stated.
According to officials, Mr Adani engaged in multiple personal meetings with government representatives to further the bribery scheme.
Michael Kugelman, who leads the South Asia Institute at the Wilson Centre, described the allegations as a significant setback for the tycoon.
“For nearly two years, Mr Adani has been engaged in efforts to restore his reputation, aiming to demonstrate that the fraud allegations made by the Hindenburg group were unfounded and that his company and its operations have been performing well,” he stated during an interview with the BBC’s Business Today programme.
However, the billionaire may find it increasingly challenging to dismiss the allegations put forth by US authorities.
US investment firm GQG Partners LLC, which has invested nearly $10bn in the Adani Group, has said it is “monitoring the charges” and may take “appropriate” actions for its portfolios.
Moody’s Ratings has characterised the indictment as a “credit negative” for the firms within the group.
The assessment of Adani Group centres on the capacity of its companies to secure capital for liquidity needs, as well as their governance practices, according to the statement.
The situation is poised to ignite a political upheaval in India.
Mr Adani maintains a strong alliance with Indian Prime Minister Narendra Modi. He has consistently encountered allegations from opposition politicians suggesting that he has gained advantages from his political connections, a claim he refutes.
In a recent press conference, opposition leader Rahul Gandhi called for the arrest of Mr Adani and the removal of Ms Buch from her role as the chief of Sebi.
The appointment of US Attorneys across the country is a responsibility held by the president of the United States. The submission arrived weeks following Donald Trump‘s election victory at the White House, during which he vowed to reform the US Justice Department.
In a recent social media post, Mr Adani congratulated Trump following the latter’s election victory and announced a commitment to invest $10 billion in the United States.
