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Indian billionaire Gautam Adani has been indicted by U.S. prosecutors over an alleged years-long scheme to bribe Indian officials in exchange for favorable terms on solar energy contracts expected to generate more than $2 billion in profits.
Shares of Adani Group companies plunged on Thursday after the 62-year-old tycoon, chairman of the multinational conglomerate and an outspoken supporter of Prime Minister Narendra Modi, was indicted in New York on charges including securities fraud.
Adani, one of Asia’s richest men, was charged along with seven others, including executives of Adani energy subsidiaries and former employees of a Canadian pension fund. His cousin Sagar Adani, executive director of a renewable energy company founded by Gautam Adani, is also among the accused.
US federal prosecutors said more than $250 million in bribes was “offered and promised” to people in the Indian government between 2020 and 2024 as part of the scheme, which was allegedly hidden from US banks and investors from whom they received billions. dollars had been raised.
They claimed that Gautam Adani had met an Indian official to “move forward” the plan.
The U.S. attorney’s office in Brooklyn has also charged three former employees of major Canadian pension fund CDPQ in connection with the alleged scheme. They say they obstructed an investigation into the bribes by deleting emails and agreeing to provide false information to the U.S. government. CDPQ, which invests in infrastructure projects, is a shareholder in Adani companies.
The charges threaten to reignite a reputational crisis for the Adani Group, which is trying to move past claims of accounting fraud and stock market manipulation filed last year by U.S. short seller Hindenburg Research. Adani has repeatedly denied wrongdoing.
Shares of Adani’s 10 listed companies fell on Thursday. The conglomerate’s flagship Adani Enterprises closed down 22 percent, port operations fell 14 percent and Adani Green Energy fell 19 percent.
U.S. Deputy Assistant Attorney General Lisa Miller said in a statement: “This indictment alleges schemes to pay more than $250 million in bribes to Indian government officials. These violations are alleged to have been committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of U.S. investors.”
Prosecutors further alleged that the defendants “extensively documented their corrupt efforts” on cellphones, in PowerPoint presentations and in Excel spreadsheets “that summarize various options for paying and concealing bribes.”
In a parallel civil lawsuit, the U.S. Securities and Exchange Commission said the alleged bribes were paid to “ensure security.” [the Indian government’s] commitment to purchase energy at above-market rates, which would benefit Adani Green and Azure Power,” two renewable energy companies in India.
Adani Green, which is building one of the world’s largest solar power plants in Khavda in the western Indian state of Gujarat, has raised more than $175 million from US investors over the life of the plan as part of a $750 million corporate bond, according to US supervisors.
Gautam Adani and Sagar Adani allegedly “induced US investors to purchase Adani Green bonds through an offering process that misrepresented not only that Adani Green had a robust anti-bribery program, but also that its senior management the company had not paid or would promise to buy bonds from Adani Green. pay bribes,” said Sanjay Wadhwa, acting director of the SEC’s enforcement division.
According to the regulator’s complaint, Sagar Adani allegedly told Azure executives and others about “incentives” or bribes. He had proposed to “motivate” state officials to enter into contracts with the Indian government department responsible for implementing renewable energy programs.
Adani Group said in a statement that the US Department of Justice and SEC allegations against Adani Green executives were “baseless and denied.” . .[and that]all possible legal action will be taken.” Adani Green said it would suspend a planned $600 million bond issue.
CDPQ said: “CDPQ is aware of charges filed in the US against certain former employees. These employees were all laid off in 2023 and CDPQ is cooperating with US authorities. In light of the ongoing cases, we have no further comment at this time.”
Azure said former directors and officers of the company referenced in the US authorities’ indictment had been “separated” for more than a year. “We have worked with these agencies on these and other matters and we will continue to do so,” the report said.
Gautam Adani has built his conglomerate into one of India’s most formidable industrial groups over the past two decades, diversifying its core ports and trading operations into mining, airports, coal and renewable energy.
It has built or bid on energy, ports and other infrastructure projects in countries including Bangladesh, Sri Lanka and Israel, where it operates the Port of Haifa.
In a post on India-India partnership. the US, with the aim of creating up to 15,000 jobs.
The rise of Adani’s business community has coincided with India’s drive to leverage private sector expertise and capital to develop its infrastructure, which has accelerated during Modi’s decade in power.
Rahul Gandhi of the Indian National Congress party, who became India’s opposition leader after this year’s general election, called for an investigation into Hindenburg’s allegations and questioned Adani’s record of winning government tenders , as well as his close ties to ruling politicians, including Modi. also from Gujarat.
On Thursday, the party said the US indictment “confirms” its demands for a parliamentary investigation. The Indian government did not immediately respond to a request for comment.
Additional reporting by Arjun Neil Alim in Hong Kong