New Delhi, Nov 21 (Reuters) – Indian billionaire Gautam Adani, one of the world’s richest individuals, has been indicted by U.S. prosecutors on multiple counts of fraud in connection with a $265 million bribery scheme. The charges have triggered a crisis for the Adani Group, marking the second major controversy for the conglomerate in two years.
Allegations of Bribery and Fraud
Adani, along with his nephew Sagar Adani and other co-defendants, is accused of paying bribes to Indian government officials to secure lucrative contracts for developing India’s largest solar power project. The contracts, expected to generate $2 billion in profits over 20 years, were allegedly obtained through corrupt means.
According to the U.S. Attorney’s Office for the Eastern District of New York, the scheme also involved raising over $3 billion in loans and bonds by concealing corruption from lenders and investors. The charges include securities fraud, securities fraud conspiracy, and wire fraud conspiracy.
Impact on the Adani Group
The allegations have sent shockwaves through the Adani Group, a conglomerate with interests spanning energy, infrastructure, and ports. Shares of Adani Green Energy, the company at the center of the scandal, plunged 17%, and other group firms saw declines exceeding 10%. The group lost $28 billion in market value on Thursday, reducing its combined market capitalization to $141 billion, a sharp drop from its $235 billion valuation before a 2023 report by short-seller Hindenburg Research.
Adani Green Energy has also canceled a planned $600 million bond sale in response to the crisis. The fallout extended to GQG Partners, a major Australian-listed backer of Adani firms, whose shares dropped 20%, their largest single-day decline since the company’s listing.
Legal Proceedings and Arrest Warrants
U.S. prosecutors have issued arrest warrants for Gautam Adani, Sagar Adani, and other defendants. These warrants are expected to be shared with international law enforcement agencies. Gautam Adani is reportedly in India, while none of the defendants is currently in custody.
The Securities and Exchange Commission (SEC) has filed a parallel civil case, accusing Gautam and Sagar Adani of violating federal securities laws, including anti-fraud provisions. The SEC is seeking permanent injunctions, civil penalties, and officer and director bans against the accused.
The SEC alleges that the Adanis participated in the bribery scheme during a September 2021 note offering by Adani Green Energy, which raised $750 million, including $175 million from U.S. investors.
Code Names and Obstruction Allegations
Court documents reveal that conspirators referred to Gautam Adani using code names like “Numero Uno” and “The Big Man.” Sagar Adani allegedly tracked bribes using his cellphone. Five other defendants face charges of conspiring to violate the Foreign Corrupt Practices Act, while four are accused of obstructing justice.
Historical Context and Market Reaction
This latest controversy follows a turbulent year for the Adani Group, which faced accusations from Hindenburg Research of improper use of offshore tax havens and inflated valuations. The group denied those allegations but saw its market value plummet by nearly $100 billion at the time.
This indictment makes Gautam Adani one of the few billionaires to face formal criminal charges in the United States. Forbes currently estimates his net worth at $69.8 billion, ranking him as India’s second-richest man after Mukesh Ambani.
A Crisis of Confidence
The charges against Adani signal a severe crisis of confidence in the conglomerate, which has been a cornerstone of India’s infrastructure and energy sectors. Investors, lenders, and international partners are closely monitoring the situation as it unfolds, with significant implications for the global perception of Indian businesses and governance. The scandal also raises broader questions about corporate accountability and transparency in emerging markets.