Indian billionaire Gautam Adani has been summoned by the US Securities and Exchange Commission (SEC) over allegations of bribery tied to a $750 million bond offering. The summons, filed in the Eastern District of New York, accuses Adani and his nephew, Sagar Adani, of orchestrating bribery schemes worth hundreds of millions of dollars to benefit an Adani Group company, while falsely claiming compliance with anti-bribery laws.
Key Allegations
The SEC lawsuit demands monetary penalties and seeks to restrict Gautam and Sagar Adani from serving as officers of publicly listed companies. Federal prosecutors have also issued arrest warrants for the two, accusing them of participating in a $265 million scheme to bribe Indian officials for securing power-supply contracts.
These contracts reportedly aimed to generate $2 billion in profits over two decades and develop India’s largest solar power plant project.
Impact on the Adani Group
The allegations have caused immediate fallout, wiping billions of dollars from the market value of Adani Group companies. Additionally, Kenya’s president canceled a major airport project with the conglomerate.
The crisis comes just two years after previous challenges to the ports-to-power giant, founded by Adani, one of the world’s richest people.
Bribery Allegations in Detail
In June 2020, Adani’s renewable energy company secured what it called the “largest solar development bid”, an agreement to supply 8 gigawatts of electricity to a state-owned power company. However, local power companies resisted the pricing terms, threatening the deal.
According to US authorities, Adani resolved this issue by bribing Indian officials to approve the agreements. These bribery allegations caught the attention of the US Department of Justice and the SEC, especially as Adani’s companies raised funds from US-based investors in transactions starting in 2021.
Adani Group’s Response
The Adani Group has denied the allegations, calling them “baseless”. The group’s CFO clarified that the charges are linked to a single contract under Adani Green Energy, accounting for just 10% of its business, and emphasized that no other entities in the conglomerate are implicated.
Conclusion
The case against Gautam Adani highlights international concerns over corporate governance and anti-bribery compliance. As legal proceedings unfold, the outcome could have significant implications for Adani’s global ventures and the broader business landscape.
