Arrest warrants were issued for Gautam Adani and his nephew Sagar Adani Thursday, hours after US prosecutors indicted them and six others over their alleged role in a $265 million bribery scheme, plunging his conglomerate deep into crisis for the second time in two years.
The multiple counts of fraud levelled against Adani, who is one of the world’s richest people, and seven other defendants, sent shares and bonds of Adani firms tumbling on Thursday. Adani Green Energy, the company at the centre of the allegations, also cancelled a $600 million bond sale.
The charges follow much turmoil for the Adani Group last year after short-seller Hindenburg Research issued a report that accused it of using offshore tax havens improperly — which the company has denied.
US federal prosecutors said the defendants agreed to pay the bribes to Indian government officials to obtain contracts expected to yield $2 billion of profit over 20 years, and develop India’s largest solar power plant project.
They also said the Adanis and another executive at Adani Green Energy’s former CEO Vneet Jaain raised more than $3 billion in loans and bonds by hiding their corruption from lenders and investors.
The three were charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy. The Adanis were also charged in a parallel US Securities and Exchange Commission (SEC) civil case.
“Gautam and Sagar Adani were engaged in the bribery scheme during a September 2021 note offering by Adani Green that raised $750 million, including approximately $175 million from U.S. investors,” the SEC said in a press statement.
“The SEC’s complaint against Gautam and Sagar Adani charges them with violating the antifraud provisions of the federal securities laws. The complaint seeks permanent injunctions, civil penalties, and officer and director bars,” it added.
Representatives for the Adani Group did not respond to repeated requests for comment. Indian authorities, including the Securities and Exchange Board of India (SEBI), also did not respond to requests for comment on the U.S. charges.
Shares in Adani Green Energy plunged 17% and stocks for many other firms in the conglomerate lost more than 10%. The group lost $28 billion in value in Thursday trade, putting its firms’ combined market capitalisation at $141 billion. Before last year’s Hindenburg report, the group’s market value was $235 billion.
Adani dollar bonds slumped, with prices down between 3-5c on bonds for Adani Ports and Special Economic Zone.
