Indian billionaire Gautam Adani.
| Photo Credit: Reuters

The U.S. fraud case against Indian billionaire Gautam Adani appears to be backed by documents that will help prosecutors make a strong case, legal experts said, but the tycoon is unlikely to be extradited to stand trial anytime soon.

Federal prosecutors in Brooklyn last month unsealed an indictment accusing Mr. Adani of bribing Indian officials to convince them to buy electricity produced by Adani Green Energy, a subsidiary of his Adani Group conglomerate, and then misleading U.S. investors by providing reassuring information about the company’s anti-corruption practices.

Gautam Adani indictment: In-depth coverage

Mr. Adani, his nephew Sagar Adani, and another Adani Group executive were charged with securities fraud and conspiracy. Five people affiliated with Azure Power Global, a formerly-U.S.-listed company also allegedly involved, were charged with conspiracy to violate the Foreign Corrupt Practices Act (FCPA).

Azure has said it had cooperated with the investigation and that those charged were no longer with the company. Adani Group has called the allegations “baseless” and vowed to seek “all possible legal recourse.”

Gautam Adani is not in custody. He has made at least two public appearances in India since the indictment, including at a Dec. 9 event also attended by Prime Minister Narendra Modi.

According to the indictment, prosecutors found ledgers of the alleged payments on Sagar Adani’s cellular phone, which they called “bribe notes.” Prosecutors also said Gautam Adani emailed himself a copy of a search warrant and grand jury subpoena the FBI had served on his nephew on March 17, 2023.

Those electronic records could be important pieces of evidence for prosecutors to try to prove that Sagar Adani and Gautam Adani knew they misled investors by failing to disclose the investigation and insisting they had strong anti-corruption practices when in fact they had paid bribes, experts said.

“The allegations include references to corroborating material, and that always provides for a stronger case,” said Stephen Reynolds, a former federal prosecutor and current partner at law firm Day Pitney.

To be sure, prosecutors may face challenges. Gautam Adani could argue that he was not personally involved in crafting the statements the company made to investors about its anti-bribery practices, said Paul Tuchmann, a former federal prosecutor in Brooklyn and now a partner at law firm Wiggin & Dana.

Prosecutors may also struggle to secure live testimony from witnesses in India because the process could require assistance from New Delhi, and the government may be reluctant to facilitate testimony that could paint Indian officials in an unfavorable light, said Mark Cohen, a former federal prosecutor in Brooklyn and current partner at law firm Cohen & Gresser.

India’s Foreign Ministry on Friday referred to a Nov. 29 statement in which it said it had not received any request on the case from Washington, and called the case a matter between private firms and the U.S. Justice Department.

The U.S. Justice Department declined to comment on whether the United States had asked India to extradite Gautam Adani.

‘PLAY BY THE RULES’

Both Adani Group and Mr. Adani himself have recently made public statements emphasizing that the conglomerate’s executives had not been charged with violating the FCPA.

Conspiracy to violate the FCPA is punishable by up to five years behind bars. The fraud charges Gautam Adani and the other Adani Group defendants face are each punishable by up to 20 years in prison.

Drew Rolle, the deputy chief of the business and securities fraud section at the Brooklyn U.S. Attorney’s office, said his office had a responsibility to protect the integrity of U.S. capital markets.

Also Read | The return of the Adani solar beam 

The office has secured a number of convictions in foreign bribery cases with U.S. connections. In August, jurors found Mozambique’s former finance minister guilty on fraud and money laundering conspiracy charges for embezzling loan proceeds he had told banks were destined for economic development projects.

Rolle said honest companies are harmed when firms like Mr. Adani’s allegedly mislead investors.

“It’s not only a bribery case, it’s an important securities enforcement case,” he said at a Dec. 6 conference in New York hosted by the Practicing Law Institute. “If you’re going to access our capital markets, you’re going to play by the rules.”

Indian billionaire Gautam Adani.
| Photo Credit: Reuters

An Indian government agency charged with promoting renewable energy has changed the way it issues power tenders to reduce the risk of corruption after U.S. allegations of bribery in some tenders, said an official with direct knowledge of the matter.

The Solar Energy Corporation of India (SECI) earns commission for linking renewable energy producers with buyers. It was an intermediary in solar power deals involving Adani Group and several states where U.S. authorities have said bribes were paid to unidentified officials between 2021 and 2022.

Gautam Adani indictment: In-depth coverage

The ports-to-power Adani Group has denied the allegations, calling them baseless.

U.S. authorities have not accused SECI of any wrongdoing.

SECI, which selects renewable energy producers for projects through bids and then signs deals with power buyers, said last month it had “no basis so far” to investigate the allegations and that it was “not clear if any of SECI’s covenants have been violated”.

About 75% of SECI’s new bids for renewable power will now be based on specific demand from states instead of the earlier practice of mainly seeking power suppliers first through tenders and then approaching buyers, said the SECI official, who did not want to be named, citing the sensitivity of the matter.

A spokesperson for SECI did not immediately respond to a request for comment outside regular business hours on Monday.

The official said the earlier practice, which used to account for about 90% of the bids, had raised the risk of corruption by power producers seeking to influence buyers in states to sign up to deals even if they did not need the power. The official did not name any companies or give any examples.

The source said SECI had not found any reason to independently investigate any deals it had been part of and that no agency within India or outside had reached out to it.

The allegations against the Adani Group, nevertheless, could temporarily cut foreign investments in India’s renewable sector, said the source, adding that SECI expected tendering to slow down for the rest of the fiscal year that ends on March 31.

Also Read | The return of the Adani solar beam 

SECI’s target for this fiscal year was to find bidders for 15 gigawatts (GW) of power, but it has managed only about 6-7 GW so far.

India is still more than 10% short of its pledge to add 175 GW of renewable power by 2022. It wants to reach 500 GW by 2030.

It’s been more than a week since the US Department of Justice, FBI and the Securities and Exchange Commission issued indictments- charging the Adani group, its top leadership including Gautam Adani of a conspiracy to bribe Indian government officials for contracts, and defrauding US investors by raising capital through bonds issues.

Remember these are indictments – they still need to go through a trial process, and only if there’s a conviction will the case itself go forward – there’s also the possibility of Adani paying fines and settling the case.

The Adani group has denied the charges – 5 counts in all naming various Adani group officials in India and the US and will take legal recourse. The links to these are below, and you can also see explainers at www.thehindu.com

Department of justice

US Securities and Exchange Commission

What is the impact of the Adani indictment on India-US ties?

To begin with, the Government’s response has been silence- with the explanation that this is a private company, and not connected with the government.

Remember, last year, the MEA had not responded to a series of allegations against the Adani group by US short-seller and market research company Hindenberg Research either. An Adani group official had alleged a conspiracy to defame India, even standing in front of the However, this time it is the FBI, the Department of Justice and the Securities and Exchange Commission making the allegations, which requires a response at a more official level.

Along with the FBI and DoJ’s investigation into the Pannun assassination plot case- the timing of the indictments into Adani appear to have political significance- given that the new Trump administration will come into place January 20th and will change most of the top prosecuting officials in both cases.

There is also the question of US double standards and overreach- given the indictment is for alleged bribes paid in India to Indian officials.

With warm personal ties with PM Modi and a planned visit by the US President to India for the Quad summit next year the government will likely not worry about the impact of other aspects of bilateral ties.

However, the company itself will not be able to raise funds in the US, nor will it have recourse to US government grants like the DFC loan for Colombo port in the foreseeable future, and this may impact India-US projects in the following areas:

Routing of funds for climate change transition from the US- given the Adani group’s dominance of solar power projects

Cooperation for High-Tech and Defence deals which may involve the group

Infrastructure projects in other countries where India, US are cooperating

What is the impact of the indictment on ties with other countries?

The first impact was seen in Kenya, where President Ruto cancelled contracts for an energy plant and airport project with the Adanis

In Sri Lanka the government announced it has a review by the ministry of Finance and Foreign Affairs looking into the Adani projects for a terminal at Colombo port, and wind energy. In responses to The Hindu, the US DFC said it is assessing the situation and hasn’t disbursed the $553 million project it promised a year ago.

In Bangladesh, after the courts ordered an enquiry, the government set up a panel to look into charges of overcharging and corruption into the Adani power agreement to supply power from a plant in Godda, Jharkhand.

In France, energy major Total said it was holding any further investment into an LNG venture with Adani.

Governments in countries like Tanzania where Adani is developing a container terminal, and Israel where Adani ports runs a terminal in Haifa port, have said they will continue with the projects however.

Remember Indian economic operations have already been affected by Geopolitics.

– Russia’s war in Ukraine has meant Sanctions against about 30 Indian companies

– Israel’s war in Gaza has affected IMEEC and I2U2

– Iran-US tensions have meant India lost a major supplier of oil due to sanctions. Also Venezuelan oil

– Sanctions on Myanmar have stopped infra projects

– Government Changes in Maldives Bangladesh and Sri Lanka have put Indian projects under the scanner

What does this mean for India’s investment diplomacy and image?

US charges will cause reputational damage when it comes to integrated and allied economy in North America and Europe.

Adani investments and projects have been closely aligned with Modi government’s foreign policy forays and priorities in infrastructure development and energy- both thermal and green power –- with projects in Nepal, Bhutan, Bangladesh, Sri Lanka, Myanmar, Kazakhstan and discussions with Indonesia, Vietnam and Greece, following shortly on high-level meetings with PM Modi- therefore it is harder to distance from the fallout of the US indictments.

If the trial proceeds in the US it puts a cloud over India’s own legal and regulatory mechanisms on dealing with corruption internally, and will raise questions about what steps the government is taking.

While these cases are about alleged corruption and coercion inside India, other states, especially where governments have changed may open enquiries into the nature of projects done by Indian companies with their predecessors.

WorldView Take:

For years, India’s foreign policy has been fuelled by its economic progress and the capacity of Indian companies to carry out international projects. It is futile to assume that charges brought against a major Indian company by a major global power will have no impact on India’s image or global economic policies. While there is no question, the US’s actions indicate a considerable overreach, they fall within American laws- and India cannot expect MNCs to operate according to Indian laws here, while not ensuring Indian companies do the same abroad.

Reading Recommendations:

 India’s Moment : Changing Power Equations around the World by Mohan Kumar
Gautam Adani: Reimagining Business in India and the World by R.N. Bhaskar

The End of the Chinese Century? How Xi Jinping Lost the Belt and Road Initiative by Bertil Lintner

The Great Tech Game: Shaping Geopolitics and the Destiny of Nations by Anirudh Suri

India’s Development Diplomacy: Understanding Development Cooperation As A Tool For Strategic Engagement In South Asia by Urmi Tat

India’s Trade Policy: Arvind Panagariya

Presentation and script: Suhasini Haidar

Editing: Kanishkaa Balachandran, Sabika Syed

Adani Power was nearly 16% up, while Adani Ports and SEZ had risen 7.2% in the morning trade on November 27, 2024.
| Photo Credit: Dado Ruvic

After getting beaten down on Tuesday, all Adani group stocks recovered sharply on Wednesday (November 27, 2024), with Adani Green Energy Ltd. seeing the first uptick in share price since the U.S. Court indictment of the firm and its senior employees on bribery and securities fraud charges came to light on November 21, rising 10% as of 1330 hours on the Bombay Stock Exchange.

The group flagship Adani Enterprises was also up 10%, after a 4.8% decline on Tuesday (November 26, 204). Adani Energy Solutions Ltd was 10% higher as well.

Also read: Former Attorney General Mukul Rohatgi says no bribery charges against Gautam Adani, nephew in U.S. indictment

Adani Wilmar had risen 7.3% so far on Wednesday (November 27, 2024), while the group’s cement firms ACC and Ambuja Cements, were up 4.3% and 4.6%, respectively.

Adani Total Gas led the gains with a 16.5% surge, indicating investors were unfazed by the French partner TotalEnergies SE’s decision to freeze fresh investments into the Adani group.

Adani Power was nearly 16% up, while Adani Ports and SEZ had risen 7.2% in the day’s trading so far.

TotalEnergies purchased a 19.75% stake in Adani Green Energy in January 2021 – after the Indian company won what was then the world’s largest solar order, and just months before the payments to officials were alleged to have begun.
| Photo Credit: Reuters

French oil major TotalEnergies SE was not informed of a U.S. investigation into possible bribery and corruption at Adani Green Energy Limited, it said on Monday (November 25, 2024), adding it will stop financial contributions to investments with Adani Group companies following last week’s U.S. federal indictment.

“Until such time when the accusations against the Adani group individuals and their consequences have been clarified, TotalEnergies will not make any new financial contribution as part of its investments in the Adani group of companies,” the company said in a statement.

“TotalEnergies was not made aware of the existence of an investigation into the alleged corruption scheme,” the company added.

U.S. prosecutors on Thursday (November 21, 2024) charged eight people — including Indian tycoon Gautam Adani, his nephew Sagar Adani and the former CEO of Adani Green Energy Limited — with promising and then making improper payments to Indian officials between July 2021 and 2024 for business advantages.

The French firm purchased a 19.75% stake in Adani Green Energy in January 2021 – after the Indian company won what was then the world’s largest solar order, and just months before the payments to officials were alleged to have begun.

Total also owns a 37.4% stake in Adani Total Gas Limited, as well as a 50% stake in three renewable joint ventures with Adani Green Energy.

Two of those joint ventures were entered into after the FBI served search warrants on Sagar Adani and seized evidence related to Adani Green Energy.

TotalEnergies shares were down 0.04% at 0945 GMT on Monday (November 25, 2024).

Adani Group’s plunged up to 20% on Thursday after he was indicted by U.S. prosecutors on charges he duped investors in a solar energy project in India by concealing that it was being facilitated by an alleged bribery scheme.

In an indictment unsealed by federal prosecutors in New York on Wednesday (November 20, 2024), Gautam Adani, 62, was charged with securities fraud and conspiracy to commit securities and wire fraud.

Also read: Gautam Adani U.S. indictment LIVE 

The flagship company Adani Enterprises witnessed a sharp decline of 20% in its share value, while Adani Energy Solutions experienced an identical drop. Adani Green Energy saw a reduction of 19.17%, Adani Total Gas decreased by 18.14%, Adani Power fell by 17.79%, and Adani Ports registered a 15% decline on the BSE.

Adani Enterprises

Adani Enterprises Limited (AEL) is a multinational publicly-listed holding company and a part of Adani Group. Through its various subsidiaries, Adani Enterprises is involved in edible oils and staple foods, airport operations, solar PV manufacturing, road infrastructure, among several other sectors.

Adani Green Energy

Adani Green Energy Limited is one of the largest renewable companies in India, with a current project portfolio of 20,434 MW. The company operates Kamuthi Solar Power Project, one of the largest solar photovoltaic plants in the world.

Adani Power Limited

Adani Power Limited, a part of the diversified Adani Group, is the largest private thermal power producer in India. APL possesses a power generation capacity of 15,250 MW comprising thermal power plants in Gujarat, Maharashtra, Karnataka, Rajasthan, Chhattisgarh, Madhya Pradesh, and Jharkhand, and a 40 MW solar power project in Gujarat.

Adani Total Gas

A joint venture between Adani Energy Solutions (37.4%) and UK’s Total Energies formed in 2005, Adani Total Gas Limited is among the four biggest distributors of municipal gas in India. It operates in 34 geographical areas and another 19 through a joint venture with Indian Oil. It also focuses on CNG, biogas, and EV mobility.

Adani Transmission

Headquartered in Ahmedabad, Adani transmission is one of India’s largest private sector electric power transmission companies.

Adani Wilmar

A multinational FMCG joint venture between Adani Enterprises (44%) and Singapore’s Wilmar International (44%) formed in 1999. It deals in the processing and sale of a variety of edible oils, flour, rice and more through brands like Fortune Foods which is also exported to the Middle East, South-East Asia, and Africa. Recently, Adani Enterprises cancelled a demerger of its stake in the venture until the venture meets public shareholding norms first.

Adani Ports and Special Economic Zones

Adani Ports and Special Economic Zone Limited (APSEZ) is the largest commercial ports operator in India accounting for nearly one-fourth of the cargo movement in the country. Its presence across 13 domestic ports in seven maritime states of Gujarat, Maharashtra, Goa, Kerala, Andhra Pradesh, Tamil Nadu and Odisha.

ACC

Formerly known as The Associated Cement Companies Limited, it was a merger of eleven cement companies — belonging to industrialists like JRD Tata, Ambala Sarabhai and so on — into a single entity in 1936. The management control of the company was taken over by Swiss cement manufacturer Holcim Group in 2004. In 2022, Adani Group acquired Holcim’s stake in ACC.

Ambuja Cements

Formerly known as Gujarat Ambuja Cement Limited, it is a cement manufacturing formed in 1983. It entered into a strategic partnership with Holcim Group in 2006, which then had a controlling stake of 61.62% in Ambuja from 2010 to 2022. When Holcim left the Indian market, Adani Group acquired it’s stake.

NDTV

Share market data from The Hindu Businessline