A US federal court in Brooklyn has issued arrest warrants for Gautam Adani, one of India’s wealthiest businessmen, and his nephew Sagar Adani. The move comes amidst allegations of large-scale bribery and fraud related to power purchase contracts in India. These warrants are part of an effort to seek accountability for alleged violations of both criminal and civil laws.
The warrants, reportedly to be handed over to Indian law enforcement, come in conjunction with legal actions by the US Securities and Exchange Commission (SEC). The SEC has filed civil charges against Adani, his nephew, and their associate, alleging violations of anti-fraud regulations.
Allegations Against Gautam Adani and Sagar Adani
US prosecutors have alleged that Gautam Adani, Sagar Adani, and their associates orchestrated a bribery scheme to secure lucrative power purchase agreements worth over $2 billion (₹16,000 crore). The accusations include paying bribes totaling $265 million (₹2,200 crore) to Indian government officials to obtain favorable contracts.
Court documents highlight how Adani and his team allegedly misled investors and lenders in the US. They are accused of hiding corrupt practices while raising over $3 billion (₹24,000 crore) in investments for Adani Green Energy projects.
SEC’s Civil Case: Misleading US Investors
In addition to criminal proceedings, the SEC has initiated a civil action against Gautam Adani, Sagar Adani, and Vineet Jain, Managing Director of Adani Green Energy. The SEC alleges that the trio made false claims to US investors, including assurances about strict anti-bribery compliance measures.
Sanjay Wadhwa, acting director of the SEC’s Enforcement Division, stated that the Adani Group had misrepresented its business practices to gain the trust of investors. According to the SEC, Adani Green Energy falsely claimed to follow ethical business practices while engaging in corrupt activities to secure deals in India.
Impact on Adani Group Shares
The allegations and subsequent legal actions have significantly affected the Adani Group. Reports of bribery and fraud have led to a sharp decline in the shares of Adani Group companies in Indian stock markets. Investors have expressed concerns about the fallout from these allegations, which could damage the group’s credibility both domestically and internationally.
Bribery Claims in Power Deals
US prosecutors have accused the Adani Group of offering massive bribes to secure power purchase agreements with Indian state-run electricity distributors. These deals were crucial for Adani Green Energy and its affiliates to remain profitable and generate steady revenue.
Prosecutors claim that Adani’s companies offered bribes to secure contracts with power distributors across five Indian states between 2021 and 2022. Despite the high cost of electricity produced by Adani’s projects, these agreements ensured significant income for the group.
Alleged Scheme and Timeline
The US Justice Department alleges that the bribery scheme began as early as 2020. Adani and his associates allegedly planned to pay bribes to secure guarantees for selling electricity generated by their projects to Indian government entities.
By 2021, state-run electricity distributors began signing agreements with Adani Green Energy, reportedly influenced by bribes. These contracts were later touted as some of the world’s largest power purchase agreements.
Concerns from US Prosecutors
Lisa Miller, US Deputy Assistant Attorney General, accused Adani and his associates of undermining the interests of American investors. She highlighted the scale of corruption involved, stating that the accused exploited India’s infrastructure needs for personal gain while misleading international investors.
US Attorney Breon Peace echoed these concerns, describing the allegations as part of a large, sophisticated scheme that jeopardized the integrity of financial markets.
India’s Role in the Investigation
As the US court has issued warrants for Gautam and Sagar Adani, it remains to be seen how Indian authorities will respond. The cooperation between Indian and US law enforcement agencies will be crucial in determining the future course of action.
While Gautam Adani has denied the allegations and termed them baseless, the legal and financial ramifications of these charges could have far-reaching consequences for the Adani Group and its business ventures globally.
