NEW DELHI: Gautam Adani and his conglomerate, the Adani Group, are at the center of a major legal and financial storm following an indictment by US prosecutors. The charges allege that Adani, his nephew Sagar Adani and other associates orchestrated a $265 million bribery scheme to secure lucrative solar power contracts in India. Between 2020 and 2024, the accused allegedly bribed Indian officials to gain business advantages while misleading US investors and financial institutions about their anti-corruption practices.

The charges against Adani and others have been filed in the US District Court for the Eastern District of New York, a prominent federal court known for handling high-profile cases involving corporate fraud, securities violations and international corruption. Based in Brooklyn, this court has jurisdiction over cases involving violations of US federal law, particularly those related to international financial systems and foreign bribery under the Foreign Corrupt Practices Act (FCPA).

The prosecution is being led by U.S. Attorney for the Eastern District of New York, Breon Peace, who oversees cases related to official misconduct, organized fraud and transnational crime.


Why US authorities took actionThe US indictment stems from the involvement of US investors and financial markets in the alleged fraud. Under the Foreign Corrupt Practices Act (FCPA), US law prohibits companies from bribing foreign officials if their activities involve US financial systems or investors.

In this case: Funds were raised from US investors and allegations pointed to fraudulent disclosures in connection with securities offerings.

Here’s everything you need to know about:
1. What are the main allegations against Gautam Adani and the Adani Group?
US prosecutors have charged Gautam Adani, his nephew Sagar Adani and others with a $265 million bribery scheme to secure solar power contracts in India. The indictment alleges that Adani Group executives paid bribes to Indian government officials between 2020 and 2024 and concealed these activities from American investors. The charges include securities fraud, wire fraud conspiracy and misleading investors about anti-corruption practices.

2. How did the alleged bribery scheme work?
The indictment details that executives used encrypted communications, cell phone tracking and coded language to discuss and execute the bribery plan. Bribes were calculated at around $30,000 per megawatt for solar projects and disguised as “development fees”. In some cases, Azure Power, a related company, transferred projects to Adani Green Energy as part of the bribery scheme.

3. What are the financial consequences of the prosecution for companies in the Adani Group?
The allegations have triggered a massive selloff in Adani Group shares, with the conglomerate losing about $27 billion in market value. Shares of Adani Enterprises fell 23% and Adani Green Energy fell 19%. The group also called off a $600 million bond offering due to the negative market reaction.

4. What is the political outcome of these allegations in India?
The prosecution has intensified political tensions. Opposition leaders, including Rahul Gandhi, have demanded Adani’s arrest and investigation into his alleged links with Prime Minister Narendra Modi. Critics argue that the case highlights a wider issue of corruption and favoritism within the Indian government, although the BJP denies these claims and stresses that legal processes should take their course.

5. What is the Adani Group’s response to the allegations?
The Adani group has denied the allegations, calling them “baseless” and politically motivated. A group statement emphasized its commitment to governance, transparency and compliance, and said it would seek all possible legal action to contest the allegations.

6. How were US federal agencies involved in the investigation?
The US investigation included the FBI seizing electronic evidence from Sagar Adani in 2023 and revealing extensive documentation of the bribery scheme, including PowerPoint presentations and encrypted communications. The US authorities have also issued arrest warrants for Gautam and Sagar Adani.

7. What are the international implications of this case?
This case has highlighted cross-border enforcement of anti-corruption laws, particularly the US Foreign Corrupt Practices Act (FCPA). It also affects international investors’ confidence in Indian conglomerates, with Adani’s global reputation and access to capital markets now under considerable scrutiny.

8. How does this relate to previous allegations against the Adani Group?
Adani Group faced similar scrutiny in 2023 when Hindenburg Research accused it of share price manipulation and improper use of tax havens. While the group denied those allegations, the current indictment adds legal weight to concerns about its business practices.

9. What role does Azure Power play in this case?
Azure Power, formerly listed on the New York Stock Exchange, is implicated as a co-conspirator. Azure executives allegedly colluded with Adani executives to plan and facilitate bribes. Azure has since stated that individuals named in the indictment are no longer associated with the company.

10. What’s next for Gautam Adani and the Adani Group?
Legal experts suggest that Adani may continue to drop the charges or negotiate a settlement with US authorities. In the meantime, Indian authorities may be under pressure to open their investigations. Market analysts predict continued volatility in Adani Group shares as the case unfolds.

(With input from others)