Adani Group India Chairman Gautam Adani speaks at the Vibrant Gujarat Global Summit in Gandhinagar, India, January 10, 2024.
Ajit Solanki/AP
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Ajit Solanki/AP
NEW YORK – An Indian businessman who is one of the world’s richest men has been indicted in the US on charges of defrauding investors by concealing that a massive solar energy project on the subcontinent was facilitated by a bribery scheme.
Gautam Adani, 62, was charged in an indictment unsealed Wednesday with securities fraud and conspiracy to commit securities and wire fraud. The case involves a lucrative arrangement for Adani Green Energy Ltd and other companies to sell 12 gigawatts of solar power to the Indian government – enough to light millions of homes and businesses.
The indictment describes Adani and its associates playing both sides of the deal.
They accused him of portraying it as rosy and above-board for Wall Street investors who poured billions of dollars into the project over the past five years, while, in India, he paid or planned to pay $265 million in bribes to government officials. to help secure billions of dollars in contracts and financing.
Adani and its associates sought to “obtain and finance vast state energy supply contracts through corruption and fraud at the expense of U.S. investors,” said Deputy Assistant Attorney General Lisa Miller.
U.S. Attorney Breon Peace said the defendants “planned an elaborate scheme” and sought to “enrich themselves at the expense of the integrity of our financial markets.”
In a parallel civil action, the US Securities and Exchange Commission accused Adani and two defendants of violating antifraud provisions of US securities laws. Regulators are seeking monetary penalties and other sanctions.
Both cases were filed in federal court in Brooklyn.
The Adani defendants include his nephew Sagar Adani, the board executive director of Adani Green Energy, and Vneet Jaain, who was the company’s chief executive from 2020 to 2023 and remains the board’s managing director.
Online court records did not list an attorney who could speak on Adani’s behalf. An email message seeking comment was left with the conglomerate’s arm, the Adani Group. An email was also sent to the attorneys representing the defendants. Sagar Adani’s lawyer, Sean Hecker, declined to comment. The others did not answer immediately.
Sanjay Wadhwa, acting director of the SEC’s Enforcement Division, said that Gautam and Sagar Adani were accused of persuading investors to buy the company’s bonds by misrepresenting “not only that Adani Green has a robust anti-bribery compliance program but that the company’s senior management does not and will not.” pay or promise to pay a bribe.”
Adani is a power player in the world’s most populous country. He built his fortune in the coal business in the 1990s. The Adani Group has grown to involve many aspects of Indian life, from manufacturing defense equipment to building roads to selling cooking oil.
In recent years, the Adani Group has made a big move towards renewable energy, implementing a philosophy of sustainable growth reflected in its slogan: “Growth with Kindness.”
The company has a clean energy portfolio of more than 20 gigawatts, including one of the world’s largest solar power plants in the southern state of Tamil Nadu. The Adani Group has stated its goal of becoming the country’s largest player in space by 2030. By 2022, Gautam Adani said the company will invest $70 billion in clean energy projects by 2032.
Last year, a US-based financial research firm accused Adani and his company of “brazen stock manipulation” and “accounting fraud.” The Adani Group called the claim “an ugly combination of selective misinformation and stale, baseless and discredited accusations.”
The company is known as a short-seller, a Wall Street term for traders who essentially bet on certain stock prices to fall, and has made such investments in relation to the Adani Group. The company’s shares fell as a result and plunged again in August when the firm, Hindenburg Research, levied more allegations of corruption.
Jaain told The Associated Press last year that Hindenburg’s allegations had little impact on ongoing projects, including the construction of 20 gigawatts of solar and wind energy projects in the northwestern Indian village of Khavda.
Prosecutors allege that Adani and its associates began planning a bribery scheme in 2020 or 2021 to secure the demand for energy that Adani Green and other companies to produce for the Solar Energy Corporation of India.
Adani Green and other companies’ high prices are killing India’s state electricity distributor, which buys power from the national government and supplies it to homes and businesses. But the companies needed the deal to make the project worthwhile and keep profits high, so they paid bribes to make it happen, prosecutors said.
After the defendants began promising bribes to government officials, in 2021 and 2022, electricity distributors in five Indian states or territories entered into agreements to buy energy, prosecutors said. The Adani company issued a statement in which it called the offer the “world’s largest” power purchase agreement.
At the same time, prosecutors said, Adanis and Jaain proved to global investors that Adani was Green and would not engage in bribery. The claims allowed him to secure billions of dollars in funding for the project on terms that “did not account for the true risks”, prosecutors said.
