India’s Adani Group on Thursday called US charges that their billionaire tycoon founder Gautam Adani had paid more than $250 million in bribes “baseless”, as the opposition leader demanded his arrest.
The stiff denial came after shares in the industrialist’s conglomerate nosedived more than 23 per cent in Mumbai, the morning after a bombshell indictment in New York accused him of deliberately misleading international investors.
Adani, once the world’s second-richest man, is a close ally of Hindu nationalist Prime Minister Narendra Modi and critics have long accused him of improperly benefitting from their relationship.
“The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied,” the conglomerate said in a statement. “All possible legal recourse will be sought,” it added.
However, Congress party leader Rahul Gandhi said the businessman should be taken into custody.
“We demand that Adani be immediately arrested. But we know that won’t happen as Modi is protecting him,” Gandhi told reporters in New Delhi. “Modi can’t act even if he wants to, because he is controlled by Adani.”
Wednesday’s indictment accuses Adani and multiple subordinates of paying huge sums of more than $250m in bribes to Indian officials for lucrative solar energy supply contracts. The deals were projected to generate more than $2 billion in profits after tax over roughly 20 years.
None of the multiple defendants named in the case are in custody.
Adani and two other board members of his Adani Group “lied about the bribery scheme as they sought to raise capital from US and international investors”, US attorney Breon Peace said in a statement.
Shares in Adani Enterprises, the conglomerate’s main listed unit, plunged 23.4pc on the Mumbai bourse during a day of frenzied sell-offs that triggered multiple trading halts.
The conglomerate’s renewable energy subsidiary, Adani Green Energy, said it had decided to halt a planned bond sale “in light of these developments”.
Gautam’s nephew and board member Sagar Adani, who is also named in the indictment, told AFP in October that there was “no political connection” between Adani Group and the Modi government.
“All the projects we got have not been granted by any concession but through an independent and transparent auction system,” he said.
Modi’s government has yet to comment on the charges but a spokesman for his ruling Bharatiya Janata Party (BJP), Amit Malviya, said the indictment appeared to implicate opposition parties rather than his own.
“Don’t get needlessly excited,” Malviya wrote on X.
Arrest warrants have been issued for Adani and his nephew Sagar Adani and prosecutors plan to hand those warrants to foreign law enforcement, court records show.
US federal prosecutors said the defendants agreed to pay the bribes to Indian government officials to obtain contracts expected to yield $2bn of profit over 20 years and develop India’s largest solar power plant project.
They also said the Adanis and another executive at Adani Green Energy, former CEO Vneet Jaain, raised more than $3bn in loans and bonds by hiding their corruption from lenders and investors.
The three were charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy. The Adanis were also charged in a parallel US Securities and Exchange Commission (SEC) civil case.
“Gautam and Sagar Adani were engaged in the bribery scheme during a September 2021 note offering by Adani Green that raised $750m, including approximately $175m from US investors,” the SEC said in a press statement.
“The SEC’s complaint against Gautam and Sagar Adani charges them with violating the antifraud provisions of the federal securities laws. The complaint seeks permanent injunctions, civil penalties, and officer and director bars,” it added.
The charges follow much turmoil for the Adani Group last year after short-seller Hindenburg Research issued a report that accused it of using offshore tax havens improperly — which the company has denied.
Shares in Adani Green Energy plunged 17 per cent and stocks for many other firms in the conglomerate lost more than 10pc. The group lost $28bn in value in Thursday trade, putting its firms’ combined market capitalisation at $141 bn. Before last year’s Hindenburg report, the group’s market value was $235 bn.
Adani dollar bonds slumped, with prices down between 3-5c on bonds for Adani Ports and Special Economic Zone.
The unsealed criminal charges by the US Attorney’s Office for the Eastern District of New York showed some conspirators referred privately to Gautam Adani with the code names “Numero uno” and “the big man,” while Sagar Adani allegedly used his cellphone to track specifics about the bribes.
Five other defendants were charged with conspiring to violate the Foreign Corrupt Practices Act, a US anti-bribery law, and four were charged with conspiring to obstruct justice.
None of the defendants is in custody, a spokesperson for US Attorney Breon Peace in Brooklyn said. Gautam Adani is believed to be in India.
Gautam Adani is worth $69.8bn according to Forbes magazine, making him India’s second-richest man after Mukesh Ambani. He is one of the few billionaires formally accused in the United States of criminal wrongdoing.
Shares in GQG Partners, an Australia-listed investment firm that is a major Adani backer, slid 20pc, its largest one-day fall since it listed three years ago. It said in a statement that it was monitoring the charges.
