U.S. prosecutors have indicted Indian billionaire Gautam Adani for fraud, issuing arrest warrants for him and his nephew, Sagar Adani, over their alleged involvement in a $265 million bribery scheme to secure power supply contracts by bribing Indian officials. The scandal marks the second major crisis for Adani’s ports-to-power conglomerate in just two years. The fallout was swift, with billions of dollars wiped off the market value of Adani Group companies, and Kenyan President William Ruto halting a nearly $2 billion airport deal with the group.
In response, Adani Group denied the accusations, calling them “baseless,” and stated it would pursue all possible legal options. U.S. authorities allege that Gautam Adani, Sagar Adani, and six others conspired to pay bribes to Indian officials to secure contracts expected to generate $2 billion in profits over 20 years, including the development of India’s largest solar power plant.
The U.S. Securities and Exchange Commission (SEC) has filed a parallel civil case, alleging that Adani Green Energy raised over $3 billion in loans and bonds while concealing the bribery scheme. The SEC claims that the company falsely stated it had not paid bribes to gain improper advantages. The indictment involves charges of securities fraud, conspiracy, and wire fraud.
It remains uncertain whether the Adanis will appear in U.S. court, as they may attempt to have the indictment dismissed without appearing, potentially leveraging India’s extradition treaty with the U.S. Gautam Adani’s whereabouts are unclear, and none of the accused are currently in custody.
In Kenya, President Ruto ordered the cancellation of a $2 billion airport project with Adani Group, signaling the international impact of the allegations. Meanwhile, Adani Green Energy canceled a planned $600 million U.S. bond sale in the wake of the indictment.
Despite these developments, White House spokesperson Karine Jean-Pierre downplayed any potential impact on U.S.-India relations, but Rick Rossow of the Center for Strategic and International Studies noted that the indictment could contribute to negative sentiment, with some in India viewing it as part of a broader effort to slow the country’s rise.
U.S. authorities also allege that Adani Green Energy misled U.S. investors by submitting false financial documents regarding its anti-corruption efforts. The indictment adds to the mounting pressure on Adani Group, which was already reeling from a report by short-seller Hindenburg Research in January 2023. The report accused the conglomerate of using offshore tax havens, a claim Adani Group denied.
Following the indictment, Adani Group shares plunged, with a collective loss of $27 billion in value. Stocks for Adani Green Energy and other group companies dropped significantly, and Adani’s dollar bonds also saw a decline.
In India, opposition parties have called for an investigation into the allegations, criticizing the preferential treatment Adani has reportedly received from Prime Minister Narendra Modi’s government. Both Modi and Adani, who are from Gujarat, have denied any wrongdoing.