Indian billionaire Gautam Adani, one of the world’s richest men, has been charged by U.S. prosecutors for his alleged involvement in a $265 million bribery scheme.
The accusations claim that Adani and others conspired to pay bribes to Indian government officials to secure a contract for building India’s largest solar power project.
The said power project was projected to generate $2 billion in profits over 20 years.
These charges have triggered significant turmoil for the Adani Group, one of India’s largest conglomerates, and sent shockwaves through global markets.
The allegations involve Adani, his nephew Sagar Adani, and other executives, including the former CEO of Adani Green Energy, Vneet Jaain.
Bribes
Prosecutors say the group concealed their actions from investors and lenders while raising over $3 billion through loans and bonds.
The scheme allegedly included bribes paid during a $750 million bond offering in 2021, of which $175 million came from U.S. investors.
The U.S. Securities and Exchange Commission (SEC) has also filed a civil case against Gautam and Sagar Adani, accusing them of violating anti-fraud laws and seeking penalties and restrictions on their corporate roles.
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In response to the charges, U.S. authorities issued arrest warrants for Adani and others, planning to forward them to international law enforcement.
Adani, believed to be in India, has not been taken into custody. The case has heightened scrutiny of Adani’s business practices,.
Following the announcement, shares in Adani Green Energy plunged by 17%, and other Adani Group stocks suffered significant losses, wiping out $28 billion from the conglomerate’s market value in a single day.
This marks another blow to the group, which saw its valuation drop from $235 billion in early 2023 to $141 billion following these new allegations.
The financial fallout extended to Adani dollar bonds, with prices dropping by 3-5 cents, and shares in GQG Partners, a major Adani investor, falling 20%—their largest single-day decline since the firm’s listing.
The Adani Group has faced growing challenges to its reputation, with these charges adding to the pressure.
“Numero Uno” and “The Big Man
Documents from the U.S. Attorney’s Office revealed that conspirators used code names for Gautam Adani, referring to him as “Numero Uno” and “The Big Man,” while his nephew reportedly monitored bribe payments via mobile phone.
Other defendants in the case are charged with violating the U.S. Foreign Corrupt Practices Act and conspiring to obstruct justice.
Adani Green Energy, central to the scandal, canceled a planned $600 million bond sale as it grapples with the fallout.
This project was expected to be a major driver of renewable energy in India, but the bribery allegations cast doubt on the legitimacy of the group’s operations.
The charges also underscore the broader risks faced by Adani’s companies, as investors grow wary of potential misconduct and transparency issues.
Gautam Adani, with a net worth of $69.8 billion according to Forbes, is India’s second-richest person after Mukesh Ambani.
However, the ongoing scandals are testing the resilience of his empire.
Despite the challenges, Adani has maintained his stance as a global leader in infrastructure and energy, and his conglomerate remains a significant player in India’s economy.
The charges against him, however, are rare for a billionaire of his stature, particularly in the U.S. legal system, which may signal a stronger international focus on corporate accountability.
Scrutiny of corruption
The broader implications of these charges extend beyond the Adani Group. The case reflects increasing scrutiny of corruption in large-scale global projects and highlights the challenges multinational firms face in maintaining ethical standards across jurisdictions.
It also raises questions about governance in India, where large conglomerates often wield significant influence over public and private sectors.
While the U.S. government has shown a strong commitment to pursuing justice in this case, the Adani Group’s response and the Indian government’s stance will be closely watched.
Whether the allegations lead to lasting damage to Adani’s empire remains uncertain, but the group’s ability to recover from this crisis will depend on how it addresses transparency and investor confidence in the coming months.
