Gautam Adani indicted by US prosecutors over $265 million bribery scheme

Indian billionaire Gautam Adani, chairman of the Adani Group, finds himself at the center of a legal and financial storm after being indicted by US prosecutors for his alleged involvement in a $265 million bribery scheme.

The charges accuse Adani, alongside his nephew Sagar Adani and six others, of paying bribes to Indian officials to secure lucrative solar power contracts expected to yield $2 billion in profits over 20 years.

This indictment has sent shockwaves across global markets, denting investor confidence in the conglomerate and straining US-India relations.

The indictment alleges that Adani Green Energy raised over $3 billion in loans and bonds from US investors while concealing corrupt practices.

During a press briefing, White House Press Secretary Karine Jean-Pierre addressed the situation, saying the US administration is "aware of the allegations" against Gautam Adani.

She referred reporters to the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) for specifics.

On the broader relationship between the US and India, Jean-Pierre reaffirmed that it "stands on an extremely strong foundation anchored in ties between our people and cooperation across a full range of global issues."

She expressed confidence that the US and India would "navigate this issue as we have with other issues." Despite the gravity of the allegations, she maintained that the bilateral relationship would remain resilient.

According to US prosecutors, Adani and his associates submitted falsified financial documents that misrepresented their adherence to anti-corruption and anti-bribery policies.

The alleged scheme culminated in a $750 million note offering in 2021, with $175 million raised from US investors.

These actions reportedly violated the US Foreign Corrupt Practices Act, which prohibits foreign companies from bribing officials to gain business advantages.

Arrest warrants for Gautam and Sagar Adani have been issued, and US prosecutors are expected to pursue international cooperation to enforce them.

Adani Group’s Denial

Adani Group has categorically denied the allegations, calling them "baseless" and vowing to explore all legal options. In a statement, the conglomerate reaffirmed its commitment to transparency and compliance across all jurisdictions.

The group’s market value, already battered by previous controversies, took another hit as its shares nosedived by over 23% on the Bombay Stock Exchange.

This isn’t the first controversy to engulf the Adani Group. Earlier in 2023, Hindenburg Research published a report accusing the conglomerate of using offshore tax havens and inflating stock values, which Adani strongly denied.

However, that report wiped approximately $150 billion off the group’s market value, down from its $235 billion peak.

Repercussions in Kenya and Beyond

The impact of the indictment isn’t confined to India. In Kenya, President William Ruto abruptly canceled a $2 billion airport project with the Adani Group, citing the unfolding crisis.

Meanwhile, Adani Green Energy scrapped plans for a $600 million U.S. bond sale, reflecting the escalating financial fallout.

U.S.-India Relations

While the White House has downplayed the indictment’s immediate impact on U.S.-India relations, the charges add complexity to an otherwise strong partnership.

White House Press Secretary Karine Jean-Pierre emphasized that the bilateral relationship remains robust, built on shared values and extensive collaboration across global issues.

However, some experts warn of potential long-term implications. Rick Rossow, head of the India program at the Center for Strategic and International Studies, noted that the indictment could fuel perceptions in India that the U.S. is using legal channels to undermine its rise as a global power.

Political Reactions in India

The case has sparked fierce political debate in India. Congress leader Rahul Gandhi called for Gautam Adani's immediate arrest, alleging that Prime Minister Narendra Modi is protecting the businessman. "We demand that Adani be immediately arrested. But we know that won't happen as Modi is protecting him," Gandhi told reporters.

Gandhi went further, claiming, "Modi can't act even if he wants to, because he is controlled by Adani." These remarks reflect ongoing political tensions surrounding the close relationship between Adani and Modi.

In response, BJP spokesperson Sambit Patra criticized Rahul Gandhi’s comments, calling them part of a "long-running effort" to target Prime Minister Modi. "Law will take its own course," Patra asserted, adding that none of the four states named in the American courts have BJP-led governments.