After recovering from allegations of fraud by Hindenburg Research earlier this year, Gautam Adani and the Adani Group have landed in a new controversy. US prosecutors have charged Gautam Adani and seven others in a $250 million bribery scheme involving Indian officials. Stocks of the Adani Group saw a steep decline of up to 20% as news of the charges broke.
The Bribery Scheme Uncovered
The bribery allegations date back to 2019-2020, during which Adani Green Energy secured contracts from the Solar Energy Corporation of India (SECI). These contracts were part of a $6 billion investment in solar energy. Prosecutors claim that bribes were used to influence Indian state authorities and secure favourable terms for the deal. Despite the project being touted as the “world’s largest solar award,” it allegedly created financial burdens for Indian states due to high energy costs.
Allegations and Evidence
The US indictment includes several accusations:
- Direct involvement of Gautam Adani in meetings to advance the bribery plot.
- Extensive documentation of the bribery scheme using digital tools like PowerPoint and Excel.
- Attempts by the accused to destroy evidence, including electronic communications and presentations.
The indictment also details how bribes were tracked using cell phones, and evidence of the scheme was captured in photographs and electronic records.
Financial and Legal Fallout
The charges have had immediate financial consequences. Adani Green Energy withdrew its $600 million bond offering, while the conglomerate’s stocks collectively lost about $28 billion in market value. The flagship company, Adani Enterprises, plunged 23%, and other subsidiaries such as Adani Ports, Adani Power, and Adani Green fell significantly.
A Pattern of Controversy
This scandal adds to a growing list of controversies surrounding the Adani Group. Earlier accusations include:
- Stock manipulation and accounting fraud (Hindenburg Research, January 2023).
- Environmental concerns and preferential treatment allegations.
These issues have drawn increasing scrutiny, tarnishing the reputation of one of India’s largest conglomerates.
Uncertain Future for Adani
With charges of securities and wire fraud looming, the Adani Group’s future remains uncertain. The potential arrest of Gautam Adani could have significant implications for the conglomerate and its global ambitions. Investors and stakeholders are closely watching how the group addresses these allegations.
