The US Department of Justice has unveiled criminal charges against Gautam Adani and specifically named executives Sagar Adani, Vineet Jain, Ranjit Gupta, Rupesh Agarwal, Cyril Cabanes, Saurabh Agarwal, and Deepak Malhotra alleged that there was an over $250 million bribery scheme to secure Indian solar energy contracts. The case, filed in Brooklyn federal court, marks another setback for the Indian conglomerate.
The Legal Framework
US prosecutors charged Adani, 62, with securities fraud, conspiracy to commit securities fraud, and wire fraud. The indictment, unsealed Wednesday, details how Adani Green Energy Ltd allegedly obtained contracts through SECI to sell 12 gigawatts of solar power, which is projected to generate $2 billion in after-tax profits over 20 years.
The Securities and Exchange Commission filed parallel civil charges against Adani and two co-defendants for violating anti-fraud provisions of US securities laws.
The Alleged Scheme
According to prosecutors, the alleged scheme between 2020-2024 involved:
- They planned to pay over $250 million in bribes to Indian officials.
- Raised over $3 billion through loans and bonds while concealing corruption
- They used code names like “Numero Uno” and “The Big Man” for their communications.
- Created PowerPoint presentations and Excel sheets to analyze bribe payment options
The prosecutors possess evidence including:
- Cell phone records tracking bribe details
- Photographs documenting bribe amounts
- Electronic communications between conspirators
- Financial analysis documents
Business Impact
The market response as of Wednesday’s trading:
- Adani Group companies lost $26 billion in market value.
- Adani Green Energy canceled plans for a $600 million bond issue.
- Adani Enterprises stock fell 23.44%.
- Adani Green dropped 18.95%.
- Adani Energy Solutions hit 20% lower circuit.
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International Repercussions
Kenya’s government canceled a procurement process worth nearly $2 billion that included:
- Nairobi airport management contract
- Power line construction projects
Credit Impact
Moody’s Rating described the indictment as “credit negative” for Adani companies, emphasizing that it would harm their creditworthiness:
- Group’s ability to access capital.
- Meeting liquidity requirements.
- Potential rating agency actions.
Corporate Response
The Adani Group spokesperson stated: “These charges are baseless. We will pursue all legal recourse available.”
State-Level Reactions
SECI CMD RP Gupta: “There is nothing against SECI that SECI has done anything wrong. There is no mention of any wrongdoing or irregularity on the part of SECI.”
YSRCP Government: “It is necessary to mention that SECI is a government of India enterprise and that there is no agreement between Andhra Pradesh DISCOMs or any other entities.
Former Chhattisgarh CM Bhupesh Baghel: “There is no matter relating to my tenure as CM between 2020-2023.”
Technical Details
The contracts involved:
- 12 gigawatt solar power supply through SECI
- 20-year operation period
- $2 billion projected after-tax profits
- Power purchase agreements between SECI and electricity distributors in Odisha, J&K, Tamil Nadu, Chhattisgarh, and Andhra Pradesh
This case represents the second major challenge for Adani Group since Hindenburg Research’s 2023 allegations of stock manipulation and accounting fraud.
