US PROSECUTORS charged Gautam Adani with helping drive a US$250 million bribery scheme, threatening to throw the Indian tycoon’s conglomerate back into turmoil just as it rebounded from a short-seller’s fraud allegations.
Federal prosecutors alleged on Wednesday (Nov 20) that Adani, one of the world’s richest people, and other defendants promised to pay more than US$250 million in bribes to Indian government officials to win solar energy contracts, and concealed the plan as they sought to raise money from US investors. The five-count indictment also accuses Gautam’s nephew Sagar R Adani and Vneet S Jaain, both executives at an Indian renewable-energy company, of breaking federal laws.
“The defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of US dollars,” Breon Peace, US Attorney for the Eastern District of New York which brought the case, said. US law allows federal prosecutors to pursue foreign corruption allegations if they involve certain links to American investors or markets.
Requests for comment to a representative for Adani Group’s US offices were not immediately returned. Lawyers for Sagar Adani and Jaain did not immediately respond to requests for comment. None of the defendants have been taken into custody.
In addition to being a monolithic presence in India, with ports, airports, power lines and highway developments, Adani Group attracts capital from around the world.
Prosecuting the case would take months, if not years, meaning that it will fall to the incoming Trump administration’s Justice Department to determine how to proceed. Peace, the Brooklyn US attorney who was appointed during the Biden administration, is expected to step down and be replaced by whomever Donald Trump picks to lead the office, which is known as EDNY.
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Neither a White House press official nor a representative for the Trump transition team immediately responded to e-mailed requests seeking comment.
Extradition treaty
Although the US and India have an extradition treaty, it’s likely that India would fight to protect its citizens from being forced to stand trial in the US. If convicted the defendants could face years behind bars, prosecutors said on Wednesday.
Beyond the Justice Department investigation, Adani has been dealing with claims from short-seller Hindenburg Research that the conglomerate manipulated its stock price and committed accounting fraud. The group has vigorously denied those allegations and its shares climbed back from their initial plunge caused by the report.
After also initially cratering on the short-seller’s claims, Gautam Adani’s fortune has rebounded as well. He’s the world’s 18th richest person with more than US$85.5 billion, according to Bloomberg Billionaires Index.
Separately, units of the conglomerate’s clean-energy arm sold a 20-year green dollar bond earlier on Wednesday in an offering that was oversubscribed.
SEC lawsuit
Prosecutors on Wednesday charged four of the eight defendants with conspiring to obstruct justice by deleting electronic evidence and lying to representatives of the Justice Department, Securities and Exchange Commission (SEC) and FBI.
The SEC, which is a civil law enforcement agency, provided detailed allegations against both Adanis and another one of the co-defendants, Cyril Sebastien Dominique Cabanes, in a parallel lawsuit. The regulator identified the firm involved in the alleged bribery scheme, which was not named in the indictment, as Adani Green Energy.
According to the regulator, Gautam Adani spearheaded an effort to pay or promise hundreds of millions of US dollars in bribes to Indian state government officials to induce them to enter contracts that Adani Green needed to develop India’s largest solar power plant project. Another company involved in the power plant project, Azure Power Global, agreed to pay some of the bribes, the SEC alleged.
In its lawsuit, the SEC said Cabanes served as a director on the board at Azure Power Global and as a representative of the company’s largest stockholder, pension fund company Caisse de Depot et Placement du Quebec, which is known as CDPQ. While serving as a director, Cabanes, and others, “schemed” to make payments to bribe state government officials in India, the SEC said in its lawsuit.
A lawyer listed by the SEC as representing Cabanes did not immediately respond to a request for comment. A representative for Azure Power Global did not immediately respond to a request for comment outside of normal business hours.
“CDPQ is aware of charges filed in the US against certain former employees,” a spokesperson for the pension manager said by e-mail. “Those employees were all terminated in 2023 and CDPQ is cooperating with US authorities.”
US authorities ramped up an existing probe into Adani Group by looking into the conduct of the company ’s billionaire founder, Bloomberg reported in March. Officials were focused on whether there were improper payments made to officials in India for favourable treatment on an energy project. BLOOMBERG
