94Ha Viewpoint
Indian billionaire Gautam Adani has been indicted by U.S. prosecutors for his alleged role in a $265 million (S$356 million) bribery scheme, plunging his conglomerate into crisis for the second time in two years.
Adani, one of the world’s richest men, and seven other defendants were charged with multiple counts of fraud, Reuters reported on Thursday (Nov 21), sending Adani companies’ shares and bonds tumbling on Thursday. Adani Green Energy, at the center of the allegations, canceled a $600 million bond sale.
Court records show that authorities have issued arrest warrants for Gautam Adani and his nephew Sagar Adani, which prosecutors plan to hand over to foreign law enforcement.
Last year, short-selling firm Hindenburg Research released a report accusing Adani Group of improperly using offshore tax havens. Adani Group subsequently fell into turmoil, but the group denied the report’s accusations.
Federal prosecutors said the defendants agreed to pay bribes to Indian government officials to secure contracts expected to generate $2 billion in profits over 20 years and develop India’s largest solar farm project.
They also said the Adani brothers and another executive, former Adani Green Energy CEO Vneet Jaain, concealed the corruption from lenders and investors as they raised more than $3 billion in loans and bonds.
The three were charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy. The Adani family was also charged in a parallel civil case with the U.S. Securities and Exchange Commission (SEC).
“Gautam and Sagar Adani engaged in a bribery scheme during the September 2021 bond offering by Adani Green Energy to raise $750 million, including approximately $175 million from U.S. investors,” the SEC said in a press release.
“The SEC’s complaint against Gautam and Sagar Adani alleges violations of the antifraud provisions of the federal securities laws. The complaint seeks permanent injunctions, civil penalties, and prohibitions on officers and directors from engaging in related activities,” the SEC added.
Representatives for the Adani Group did not respond to multiple requests for comment. Indian authorities, including the Securities and Exchange Board of India (SEBI), also did not respond to requests for comment on the U.S. allegations.
Shares of Adani Green Energy plunged 17%, while shares of many other companies in the group fell more than 10%. The group lost $28 billion in market value in Thursday trading, bringing the total market value of its companies to $141 billion. Before the Hindenburg report was released last year, the group’s market value was $235 billion.
Adani’s dollar bonds plunged, with Adani Ports and SEZ bonds falling 3 cents to 5 cents on the dollar.
Gautam Adani, who is worth $69.8 billion and is India’s second-richest man after Mukesh Ambani, is one of the few billionaires to have been formally charged with criminal wrongdoing in the United States, according to Forbes magazine.
