Gautam Adani, the billionaire chair of the Adani Group has been indicted in New York over his role in an alleged multibillion-dollar bribery and fraud scheme, according to U.S. prosecutors.
Authorities said Adani and seven other defendants agreed to pay about $265 million in bribes to Indian government officials to obtain contracts. The contracts are expected to yield $2 billion of profit over 20 years, and develop India’s largest solar power plant project. The defendants include his nephew Sagar Adani.
This has led to an immediate fallout of the Adani empire’s shares.
Offshore Tax Havens
The charges were announced hours after Adani on Wednesday raised $600 million by selling 20-year “green” bonds.
They also came nearly two years after U.S. short-seller Hindenburg Research accused Adani Group of using offshore tax havens improperly, which the company denied.
Hindenburg’s January 2023 report sparked an approximately $150 billion meltdown in Adani Group stocks.
Shares Crash
Adani Green Energy cancelled plans on Thursday to raise $600 million in U.S. dollar-denominated bonds, according to four sources with direct knowledge of the matter. The bond had been priced but was pulled following the news.
Adani Green Energy did not immediately respond to a request for comment on the shelved transaction.
In early Asian trading on Thursday, Adani dollar bonds slumped, with prices down between 3-5c on bonds for Adani Ports and Special Economic Zone. The falls were the largest since the Adani Group came under a short-seller attack in February 2023.
Adani Electricity Mumbai debt maturing in February 2030 fell nearly eight cents. The dollar bonds issued by Adani Transmission also notched falls larger than five cents to trade just above 80 cents.
The price falls were the biggest since February 2023 when short-seller Hindenburg Research published a negative report, questioning the group’s debt levels and use of tax havens.
The Adani Group has not responded to requests for comment on the indictment.
Background
Gautam Adani is one of the richest men in the world. According to Forbes magazine, his net worth is around $69.8 billion. This makes him the world’s 22nd richest person. In India, he is short behind Reliance Industries Chair Mukesh Ambani to be India’s second-richest person.
Last week, Gautam Adani posted on social media platform X that his conglomerate planned to invest $10 billion in U.S. energy security and infrastructure projects, creating a potential 15,000 jobs, without providing a timetable.
Adani announced the investment while also congratulating U.S. President-elect Donald Trump on his election win.
Trump has pledged to make it easier for energy companies to drill on federal land and build new pipelines.
Prime Minister Narendra Modi has been accused by political opponents of protecting Adani and his companies, including from Hindenburg’s accusations. Modi has dismissed the opposition’s claims as “lies and abuses.”
(with inputs from Reuters)
