US charges Indian billionaire Gautam Adani with fraud

Indian billionaire Gautam Adani has been charged with fraud in the United States, accused of orchestrating a $250 million bribery scheme to secure contracts for his renewable energy business. The criminal charges, filed in New York on Wednesday, mark another setback for Adani, who is one of India’s wealthiest individuals. His business empire spans various sectors, including ports, airports, and renewable energy.

The indictment alleges that Adani and other senior executives in his conglomerate arranged payments to Indian government officials in exchange for securing contracts for Adani Green Energy, which was expected to generate over $2 billion in profits over the next two decades. These contracts were crucial for expanding his company’s foothold in India’s growing renewable energy sector. The charges come after months of rumors and an ongoing investigation, with prosecutors claiming that the company had obstructed their inquiries.

The case represents the latest chapter in a series of controversies surrounding Adani’s business practices. Shares of his companies took a significant hit following the charges, with losses exceeding 10% in Thursday morning trade. The Adani Group’s market capitalization dropped by roughly $30 billion, while Adani Green Energy canceled a $600 million bond offering as a result of the crisis.

The conglomerate has been under scrutiny in the U.S. since 2023 when a high-profile report accused Adani of fraud. These allegations prompted a market sell-off, but Adani denied the claims and continued to insist on the integrity of his business operations. The new charges are related to accusations of bribery, and prosecutors assert that the company misled investors in order to raise billions of dollars in loans and bonds, including from U.S. investors.

U.S. prosecutors argue that Adani’s company lied about its anti-bribery practices, including misleading investors about ongoing investigations into the alleged bribery scheme. “As alleged, the defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars and lied about the bribery scheme as they sought to raise capital from U.S. and international investors,” said U.S. Attorney Breon Peace in a statement. Peace emphasized his office’s commitment to rooting out corruption and protecting investors from fraudulent activities.

Adani personally met with government officials to facilitate the bribery scheme, according to the prosecutors. This revelation adds another layer of complexity to an already contentious legal battle.

Michael Kugelman, the director of the South Asia Institute at the Wilson Center, referred to the charges as a “body blow” to Adani’s efforts to rehabilitate his image. For nearly two years, Adani has been working to disprove allegations made by the Hindenburg Group, a financial research firm that accused him of fraudulent business practices. Adani has maintained that these allegations were unfounded and that his companies have been performing well. However, Kugelman believes that these new charges from the U.S. Department of Justice will be much harder for Adani to dismiss.

Adani has long been a close ally of Indian Prime Minister Narendra Modi. This relationship has raised suspicions among opposition politicians, who claim that Adani has used his political ties to benefit from government contracts and favorable policies, a claim that Adani denies. The latest fraud charges could further fuel these political debates and allegations of cronyism.

The timing of the filing has also attracted attention. The U.S. Attorney positions, responsible for prosecuting cases like this, are appointed by the president. The charges come just weeks after Donald Trump’s election win, raising questions about potential political influences in the timing of the case. Notably, Adani congratulated Trump on his election victory and promised to invest $10 billion in the U.S. as part of the goodwill gesture.

While the legal battle is far from over, the fraud charges and the resulting market fallout have put significant pressure on Adani and his conglomerate. His reputation and business interests could be severely affected as the U.S. investigation moves forward. Additionally, these charges may lead to broader questions about transparency, corporate governance, and the role of political connections in business dealings, not only in India but also in the international marketplace. The legal and financial ramifications of this case are likely to unfold over the coming months, making it a key issue for both Adani’s business empire and the broader global economy.