A US court has indicted Gautam Adani, his nephew Sagar Adani and six others on charges of duping investors and bribery.
What Happened?
Gautam Adani, one of the world’s wealthiest individuals, has been indicted by the U.S. Securities and Exchange Commission (SEC) for allegedly deceiving investors. The indictment claims Adani's company concealed that a significant solar energy project in India was facilitated through a bribery scheme.
What Are the Allegations?
Prosecutors allege that Gautam Adani and his co-defendants orchestrated a bribery scheme beginning around 2020 or 2021. This scheme was designed to help renewable energy firms, Adani Green Energy and Azure Power, secure multi-billion-dollar solar energy projects awarded by the Indian government. The complaint states that the group violated federal securities anti-fraud regulations, prompting demands for permanent injunctions, civil penalties, and bans on serving as corporate officers or directors.
According to the U.S. court documents, Adani secured contracts from state-owned power companies in Chhattisgarh, Tamil Nadu, Jammu & Kashmir, Odisha, and Andhra Pradesh. Sagar Adani, Gautam Adani’s nephew, is alleged to have meticulously tracked the bribery details, including which government officials were approached, the amount of the bribe offered, and the solar power agreements secured in return.
The documents further claim that the Adani group falsified records to attract billions of dollars in investments from U.S. stock markets. The SEC accused the group of misleading investors by falsely claiming that Adani Green Energy had a strong anti-bribery compliance program.
Who Else Is Involved?
The U.S. Court has charged seven additional individuals along with Gautam Adani, including his nephew Sagar Adani. Former executives Vineet Jain, Ranjit Gupta, and Rupesh Agarwal are also indicted. Cyril Cabanes, Saurabh Agarwal, and Deepak Malhotra, who are former employees of a Canadian institutional investor, face charges of conspiring to violate the Foreign Corrupt Practices Act.
What About Azure Power?
Azure Power, a renewable energy firm based in Gurugram, India, has also been implicated. According to the U.S. SEC, the company agreed to pay bribes to secure solar power contracts in India. Azure Power's Director, Cyril Cabanes, who was also a representative for Canada’s pension fund CDPQ, was indicted. Cabanes was dismissed from his position in 2023.
The Fallout
In response to the allegations, Adani Green Energy abruptly canceled plans to raise $600 million through U.S. dollar-denominated bonds on Thursday, November 21, 2024. According to four sources with direct knowledge of the matter, the bonds had been priced but were withdrawn following the news of the indictment.
The repercussions were swift in the stock market, with Adani Group companies suffering a loss of nearly $28 billion in market value during morning trading. Shares of the flagship company, Adani Enterprises, plummeted by 23%, while stocks of Adani Ports, Adani Total Gas, Adani Green, Adani Power, Adani Wilmar, Adani Energy Solutions, ACC, Ambuja Cements, and NDTV saw declines ranging from 20% to 90%.
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