Inside India: Adani Group Faces Bribery and Fraud Charges in U.S.
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The Big Story
A major business meeting in New Delhi involving Vneet Jaain, CEO of $25 billion Adani Green Energy, and other high-profile figures, including one of Asia’s wealthiest men, Gautam Adani, has become the center of a U.S. federal investigation.
Jaain reportedly photographed a document summarizing payments owed by Azure Power, a former NYSE-listed company, for alleged bribes to Indian government officials. U.S. prosecutors in New York seized Jaain’s devices and included the evidence in an indictment charging Adani executives with bribery and fraud.
The charges claim Adani companies paid $265 million in bribes to secure lucrative energy contracts, with details recorded in documents like spreadsheets. One such document highlights $7 million paid for a 650-megawatt project and $76 million for a 2.3-gigawatt deal. The investigation has also resulted in a federal arrest warrant for Gautam Adani.
Why Are U.S. Authorities Involved?
The case revolves around misleading U.S. and global investors to raise $3 billion in capital to fund these projects. According to U.S. prosecutors, Gautam Adani, Jaain, and others falsely denied bribery allegations while raising funds. The Securities and Exchange Commission (SEC) labeled the scheme “massive bribery,” citing $175 million raised from U.S. investors and Azure Power’s prior NYSE listing.
Adani Group’s Response
The Adani Group denies the allegations, calling them “baseless.” A spokesperson assured stakeholders that the group maintains high governance and compliance standards. Azure Power stated it has cooperated with U.S. authorities and clarified that implicated staff are no longer with the company.
Financial Fallout
Adani Enterprises’ shares plunged nearly 25%, and its bonds saw significant declines. Moody’s flagged the charges as “credit negative,” raising concerns about the group’s ability to access future funding. The group also canceled a planned $600 million bond sale.
GQG Partners, which previously invested $1.9 billion in Adani companies despite past controversies, announced a review of its portfolios. Meanwhile, the firm’s own shares dropped by 20%.
Wider Implications
The charges could deter foreign investors, already pulling record sums from Indian markets in recent months. Matt Orton of Raymond James warned the allegations pose significant risks to India’s investment appeal despite certain equities remaining attractive.
Lenders to Adani Green Energy, including Indian banks and Singapore-based DBS Group, also face scrutiny. Citi analysts estimate Indian banks are exposed to $15 billion in loans, with State Bank of India holding a significant portion.
Regulatory Pressure in India
The case has also sparked criticism of Indian regulators. Opposition leader Rahul Gandhi questioned the silence of India’s Central Bureau of Investigation (CBI) and Securities and Exchange Board of India (SEBI), which had faced earlier accusations of conflicts of interest in investigating Adani.
The controversy continues to unfold, raising questions about governance, accountability, and investor confidence in one of India’s largest conglomerates.
U.S. authorities have accused Gautam Adani, Vneet Jaain, and others of orchestrating a $265 million bribery scheme to secure energy contracts in India.
The indictment alleges that Adani executives bribed officials to overcharge state-owned electricity companies for solar power. Evidence includes spreadsheets showing millions paid for deals, including $7 million for a 650 MW project. U.S. prosecutors claim the group misled global investors to raise $3 billion, labeling it a “massive bribery scheme.”
Adani denies the charges, calling them baseless, but shares plummeted 25%, with bonds and investor confidence also shaken. Moody’s flagged the case as credit negative, complicating Adani’s ability to access funding.
Indian regulators face pressure to act, while foreign investors reconsider their positions. Critics, including opposition leader Rahul Gandhi, question Indian agencies’ silence, spotlighting governance and accountability issues. The fallout could reshape investor sentiment toward India.
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The allegations against the Adani Group mark a critical moment for governance, investor trust, and India’s global reputation. As investigations deepen, the fallout could reshape foreign investment and regulatory practices in the region.