Gautam Adani faces U.S. summons over multimillion-dollar bribery scheme

The U.S. Securities and Exchange Commission (SEC) has summoned Indian billionaire Gautam Adani and his nephew Sagar Adani in connection with allegations of orchestrating a multimillion-dollar bribery scheme. The accusations center around claims that the Adanis facilitated payments amounting to hundreds of millions of dollars to Indian government officials. These alleged actions, linked to Adani Green Energy Ltd., occurred while the company reportedly misrepresented its adherence to global anti-bribery regulations during a $750 million bond issuance.

According to court documents from the Eastern District of New York, the SEC’s complaint seeks monetary penalties and restrictions on the Adanis from holding executive roles in publicly listed companies. The summons, issued earlier this week, mandates a response from the accused parties within 21 days. Simultaneously, U.S. federal prosecutors have issued arrest warrants for Gautam Adani and Sagar Adani, accusing them of participating in a $265 million bribery scheme aimed at securing lucrative power-supply contracts.

The federal indictment alleges that Gautam Adani and seven other defendants, including his nephew, conspired to pay bribes to obtain contracts expected to generate $2 billion in profits over two decades. These contracts were tied to the development of India‘s largest solar power plant. While the allegations are significant, they pertain specifically to one project under Adani Green Energy, which accounts for about 10% of the company’s operations. Chief Financial Officer Jugeshinder Singh emphasized that no other entities within the Adani Group are implicated in the charges.

The Adani Group has categorically denied the allegations, calling them “baseless.” Company representatives argue that the indictment is politically motivated and unrelated to the conglomerate’s overall business operations. This latest development, however, adds to mounting scrutiny over the conglomerate, which has faced significant challenges in recent years.

In 2023, Adani Group came under fire following a report by Hindenburg Research, which accused the conglomerate of stock manipulation and accounting fraud. The fallout from these allegations led to a substantial loss in market capitalization for Adani Group companies. Now, the bribery allegations are triggering further financial turbulence. Reports indicate billions of dollars have been wiped from the group’s market value, while Kenya recently canceled a major airport construction project previously awarded to the Adani Group.

Industry analysts suggest the legal challenges could have far-reaching implications for the Adani Group’s global reputation and business operations. Some experts argue the case underscores the risks of inadequate compliance measures within multinational corporations. The SEC’s involvement also highlights the global reach of U.S. regulators in tackling corporate misconduct, especially when it potentially affects American investors.

For the Adani Group, the road ahead is uncertain. The allegations and their potential consequences could influence the company’s ability to attract future investments and secure international contracts. The legal proceedings will be closely monitored by investors, regulators, and industry stakeholders, with significant implications for the group’s operations and reputation in both domestic and global markets.