Adani Group founder indicted by US authorities over alleged bribery

There are allegations of $250m of bribes paid to Indian government officials to secure solar energy contracts for an Indian energy firm with Guatam Adani named by a court.

November 21, 2024

Adani Group’s founder Guatam Adani has been named in a five count indictment from the US New York eastern district court. 

The court alleges that more than $250 million in bribes were promised to Indian government officials to secure solar energy contracts for an Indian energy firm. As a result of the allegations, Adani Green Energy, although not specifically named in the indictment, has decided not to proceed with a $600 million US denominated bond offering. 

Shares in many of Adani's companies fell heavily at the opening of trading hours on Thursday, November 21. 

A court statement said that five-count criminal indictment was unsealed on in federal court in Brooklyn charging Gautam Adani, Sagar Adani and Vneet Jaain, executives of "Indian energy company', with conspiracies to commit securities and wire fraud and substantive securities fraud for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions on the basis of false and misleading statements. Arrest warrants have been issued for Gautam Adani and Sagar Adani. 

The indictment also charges Ranjit Gupta and Rupesh Agarwal, former executives of a renewable-energy company with securities that had traded on the New York Stock Exchange (the US issuer), and Cyril Cabanes, Saurabh Agarwal and Deepak Malhotra, former employees of Canadian pension fund CDPQ, with conspiracy to violate the Foreign Corrupt Practices Act in connection with a bribery scheme also perpetrated by Gautam Adani, Sagar R. Adani and Jaain, involving one of the "world’s largest solar energy projects."

Breon Peace, US attorney for the Eastern District of New York, Lisa Miller, deputy assistant attorney general for the Justice Department’s Criminal Division and James Dennehy, assistant director in charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the charges.

“As alleged, the defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars and Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain lied about the bribery scheme as they sought to raise capital from US and international investors,” stated United States Attorney Peace.  “My office is committed to rooting out corruption in the international marketplace and protecting investors from those who seek to enrich themselves at the expense of the integrity of our financial markets.”

“This indictment alleges schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice,” stated deputy assistant attorney general Miller.  “These offenses were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of US investors.  The criminal division will continue to aggressively prosecute corrupt, deceptive, and obstructive conduct that violates US law, no matter where in the world it occurs.” 

“Gautam S. Adani and seven other business executives allegedly bribed the Indian government to finance lucrative contracts designed to benefit their businesses. Adani and other defendants also defrauded investors by raising capital on the basis of false statements about bribery and corruption, while still other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government’s investigation,” stated FBI assistant director in charge Dennehy. “The FBI maintains its steadfast mission to expose all corrupt agreements, especially with international governments, and protect investors from related harm.”

As alleged in the indictment, between approximately 2020 and 2024, the defendants agreed to pay more than $250 million in bribes to Indian government officials to obtain lucrative solar energy supply contracts with the Indian government, which were projected to generate more than $2 billion in profits after tax over an approximately 20-year period.  

According to the allegations, on several occasions, Gautam S. Adani met with an Indian government official to advance the bribery scheme, and the defendants held in-person meetings with each other to discuss aspects of its execution. The defendants frequently discussed their efforts in furtherance of the Bribery Scheme, including through an electronic messaging application. The defendants also extensively documented their corrupt efforts: for example, Sagar R. Adani used his cellular phone to track specific details of the bribes offered and promised to government officials; Vneet S. Jaain used his cellular phone to photograph a document summarising various bribe amounts the U issuer owed for its respective portion of the bribes; and Rupesh Agarwal prepared and distributed to other defendants multiple analyses using PowerPoint and Excel that summarised various options for paying and concealing bribe payments. 

According to the statement, during this same period, Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain allegedly conspired to misrepresent firm’s anti-bribery and corruption practices and conceal the Bribery Scheme from U.S. investors and international financial institutions in order to obtain financing, including to fund those solar energy supply contracts procured through bribery.  

As alleged, Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain caused the 'Indian enegry firm' and certain of its subsidiaries to raise capital on the basis of false and misleading statements in connection with two US dollar-denominated syndicate loans totaling more than $2 billion from lender groups comprised of international financial institutions and US-based investors; and (ii) two Rule 144A bond offerings for more than $1 billion underwritten by international financial institutions, which were marketed and sold to investors in the US, among other places.  

In addition, Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain caused Adani Green Energy to make false statements in their consolidated financial statements and to the market and investors regarding the Bribery Scheme.

FinanceAsia has reached out to the Adani Group and CDPQ for comment.  

This is a developing story. 

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