Gautam Adani. Files
| Photo Credit: Reuters

The U.S. Department of Justice (DoJ) has issued a five-count criminal indictment of Gautam Adani, chairman of the Adani Group, and several of his business associates. The charges include promising more than $250 million in bribes to Indian government officials to secure solar energy contracts, conspiracies to commit securities and wire fraud, and orchestrating “a multi-billion dollar scheme” to defraud U.S. investors and global financial institutions by giving “false and misleading statements”. The indictment was unsealed by the U.S. Attorney’s Office for the Eastern District of New York late on November 20, 2024.

Gautam Adani U.S. indictment LIVE updates: Adani Group denies ‘baseless’ allegations; Rahul Gandhi demands businessman’s arrest

In a parallel move, the U.S. Securities and Exchange Commission (SEC) has also charged Gautam Adani and Sagar Adani (Gautam’s nephew and head of Adani Green Energy), along with Cyril Cabanes, a top executive of Azure Power Global Limited, (a New Delhi-headquartered renewable energy company that used to be listed on the New York Stock Exchange), with a massive bribery scheme involving Adani Green and Azure Power.

While the Department of Justice’s indictment constitutes a criminal case, the SEC’s is a civil complaint and if proved, could result in a “permanent injunction, a civil penalty, and an officer and director bar”. The SEC’s complaints were filed in the U.S. District Court for the Eastern District of New York.

Gautam Adani indicted in US: What do we know so far?

Reacting to these developments, Adani Green Energy Limited has withdrawn its proposed $600 million U.S. dollar denominated bond offering. Shares of Adani Group companies lost about $28 billion in market value in morning trade on Thursday (November 21, 2024.)

What does the indictment say?

The indictment concerns the actions of the defendants between 2020 and 2024. The defendants are Gautam Adani, Sagar Adani, Executive Director of Adani Green Energy, Vneet S. Jaain, former CEO of Adani Green Energy, Ranjit Gupta, former CEO of Azure Power Global, Cyril Cabanes, a former managing director at CDPQ, a Canadian pension fund which is also a majority stockholder of Azure Power, Saurabh Agarwal, former managing director of CDPQ India, Deepak Malhotra, former executive of CDPQ, and Rupesh Agarwal, former CEO of Azure Power.

Under the U.S.’s Foreign Corrupt Practices Act, 1977 (FCPA), it is unlawful to make payments to foreign government officials in a bid to obtain or retain business. It is also a criminal offence to raise money by misleading investors about key corporate governance practices, which this case concerns compliance with the FCPA. Further, it is unlawful to obstruct federal investigations by giving false information and destroying evidence such as electronic communications. It is also a separate offence to hide the authorisation of bribery practices in company annual reports. The defendants have been charged with offences on all these counts.

Allegations and scandals against the Adani Group: A timeline

According to the indictment, starting in 2020, the defendants authorised and collaborated on a scheme to pay more than $250 million in bribes to Indian government officials in order to secure solar power purchase contracts for Adani Green Energy and Azure Power from the Solar Energy Corporation of India (SECI), a company of the Union Ministry of New and Renewable Energy whose mission is to increase the use of renewable-energy in India.

The U.S. DoJ indictment has alleged that the Adanis resorted to a bribery scheme because SECI was unable to find buyers among State distribution companies (discoms) for the Adanis’ solar power, whose price was above market rates. But many State discoms did subsequently sign sale agreements with SECI to buy the Adanis’ more expensive renewable power.

The indictment notes that “following the promise of bribes to Indian government officials — between July 2021 and February 2022 — electricity distribution companies for the States and regions of Odisha, Jammu and Kashmir, Tamil Nadu, Chhattisgarh and Andhra Pradesh entered into PSAs [Power Sale Agreements) with SECI”. Further, “Andhra Pradesh’s electricity distribution companies entered into a PSA with SECI on or about December 1, 2021” after which the State agreed to purchase approximately seven gigawatts of solar power, by far the largest amount of any Indian State or region.”

And then, to fund the operations of Adani Green Energy and its subsidiaries, the defendants committed securities fraud and wire fraud (any fraud that uses electronic communications through the U.S.) by hiding their FCPA violations to obtain bank loans worth more than $2 billion from international financial institutions and U.S.-based asset management companies. Also, by “offering more than $1 billion in securities” that were marketed and sold to investors in the U.S., Adani Green Energy and its directors “relied on the United States’ financial system to perpetrate this fraudulent scheme by….causing wires to be sent and received that passed through the United States.”

Adani indictment in U.S. vindicates demand for JPC probe, says Congress

The Adani Group has denied the allegations of the U.S. Department of Justice and the SEC, terming them “baseless”. In a statement, a spokesperson for the conglomerate said, “As stated by the U.S. Department of Justice itself, ‘the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.’ All possible legal recourse will be sought. The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations.”

Gautam Adani. Files
| Photo Credit: Reuters

The U.S. Department of Justice (DoJ) has issued a five-count criminal indictment of Gautam Adani, chairman of the Adani Group, and several of his business associates. The charges include promising more than $250 million in bribes to Indian government officials to secure solar energy contracts, conspiracies to commit securities and wire fraud, and orchestrating “a multi-billion dollar scheme” to defraud U.S. investors and global financial institutions by giving “false and misleading statements”. The indictment was unsealed by the U.S. Attorney’s Office for the Eastern District of New York late on November 20, 2024.

Gautam Adani U.S. indictment LIVE updates: Adani Group denies ‘baseless’ allegations; Rahul Gandhi demands businessman’s arrest

In a parallel move, the U.S. Securities and Exchange Commission (SEC) has also charged Gautam Adani and Sagar Adani (Gautam’s nephew and head of Adani Green Energy), along with Cyril Cabanes, a top executive of Azure Power Global Limited, (a New Delhi-headquartered renewable energy company that used to be listed on the New York Stock Exchange), with a massive bribery scheme involving Adani Green and Azure Power.

While the Department of Justice’s indictment constitutes a criminal case, the SEC’s is a civil complaint and if proved, could result in a “permanent injunction, a civil penalty, and an officer and director bar”. The SEC’s complaints were filed in the U.S. District Court for the Eastern District of New York.

Reacting to these developments, Adani Green Energy Limited has withdrawn its proposed $600 million U.S. dollar denominated bond offering. Shares of Adani Group companies lost about $28 billion in market value in morning trade on Thursday (November 21, 2024.)

What does the indictment say?

The indictment concerns the actions of the defendants between 2020 and 2024. The defendants are Gautam Adani, Sagar Adani, Executive Director of Adani Green Energy, Vneet S. Jaain, former CEO of Adani Green Energy, Ranjit Gupta, former CEO of Azure Power Global, Cyril Cabanes, a former managing director at CDPQ, a Canadian pension fund which is also a majority stockholder of Azure Power, Saurabh Agarwal, former managing director of CDPQ India, Deepak Malhotra, former executive of CDPQ, and Rupesh Agarwal, former CEO of Azure Power.

Under the U.S.’s Foreign Corrupt Practices Act, 1977 (FCPA), it is unlawful to make payments to foreign government officials in a bid to obtain or retain business. It is also a criminal offence to raise money by misleading investors about key corporate governance practices, which this case concerns compliance with the FCPA. Further, it is unlawful to obstruct federal investigations by giving false information and destroying evidence such as electronic communications. It is also a separate offence to hide the authorisation of bribery practices in company annual reports. The defendants have been charged with offences on all these counts.

Allegations and scandals against the Adani Group: A timeline

According to the indictment, starting in 2020, the defendants authorised and collaborated on a scheme to pay more than $250 million in bribes to Indian government officials in order to secure solar power purchase contracts for Adani Green Energy and Azure Power from the Solar Energy Corporation of India (SECI), a company of the Union Ministry of New and Renewable Energy whose mission is to increase the use of renewable-energy in India.

The U.S. DoJ indictment has alleged that the Adanis resorted to a bribery scheme because SECI was unable to find buyers among State distribution companies (discoms) for the Adanis’ solar power, whose price was above market rates. But many State discoms did subsequently sign sale agreements with SECI to buy the Adanis’ more expensive renewable power.

The indictment notes that “following the promise of bribes to Indian government officials — between July 2021 and February 2022 — electricity distribution companies for the States and regions of Odisha, Jammu and Kashmir, Tamil Nadu, Chhattisgarh and Andhra Pradesh entered into PSAs [Power Sale Agreements) with SECI”. Further, “Andhra Pradesh’s electricity distribution companies entered into a PSA with SECI on or about December 1, 2021” after which the State agreed to purchase approximately seven gigawatts of solar power, by far the largest amount of any Indian State or region.”

And then, to fund the operations of Adani Green Energy and its subsidiaries, the defendants committed securities fraud and wire fraud (any fraud that uses electronic communications through the U.S.) by hiding their FCPA violations to obtain bank loans worth more than $2 billion from international financial institutions and U.S.-based asset management companies. Also, by “offering more than $1 billion in securities” that were marketed and sold to investors in the U.S., Adani Green Energy and its directors “relied on the United States’ financial system to perpetrate this fraudulent scheme by….causing wires to be sent and received that passed through the United States.”

Adani indictment in U.S. vindicates demand for JPC probe, says Congress

The Adani Group has denied the allegations of the U.S. Department of Justice and the SEC, terming them “baseless”. In a statement, a spokesperson for the conglomerate said, “As stated by the U.S. Department of Justice itself, ‘the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.’ All possible legal recourse will be sought. The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations.”

Adani Corporate House in Ahmedabad. File.
| Photo Credit: AP

Hours after a statement from the New York Eastern District court indicted Gautam Adani and the other board of directors of Adani group of companies of criminal and civil irregularities, the Adani group denied the allegations against Adani Green calling them baseless.

Also Read:Gautam Adani U.S. indictment LIVE updates

The apples to airport conglomerate said that they were innocent until proven guilty, referring to a line in the U.S. Department of Justice (DoJ) statement and added that they were ready to resort to “all possible legal recourse.”

“The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations. We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws” the statement read.

Adani group’s response assumes significance as they had withdrawn their $600 million worth bonds issue in the U.S. hours before the statement was released.

Earlier in the day the DoJ in its statement indicted Gautam Adani, Sagar Adani and other board of directors in company on five counts ranging from civil case like securities fraud to criminal case like wire fraud, corrupt practices and obstruction of justice. The stocks of Adani’s seven listed companies in the bourses crashed about 10% on open, with Adani Energy Solutions falling the most.

Adani Enterprises Ltd stocks were at ₹2317 a piece, 18% lower than the previous close on the National Stock Exchange at around 2 PM on November 21.