Why has Indian billionaire Gautam Adani been charged in a US bribery case?

United States prosecutors indicted billionaire Gautam Adani, 1 of the world’s richest people, connected Wednesday implicit his alleged pb relation successful a bribery strategy linked to a mega-sized star powerfulness plant.

In a statement, the US Department of Justice (DOJ) alleged that Adani – a adjacent state of India’s Prime Minister Narendra Modi – and 7 of his associates, including his nephew Sagar Adani, promised Indian officials much than $250m successful bribes to unafraid vigor contracts being funded by planetary investors, including immoderate from the US.

On Thursday, the Adani Group denied the allegations and called the indictment a “baseless move”. The radical said it has “steadfastly maintained the highest imaginable standards of governance and transparency” and would question “all imaginable ineligible recourse”.

Adani Group companies mislaid astir $28bn successful marketplace worth connected Thursday greeting pursuing the indictment arsenic shares successful the group’s listed firms fell by betwixt 10 and 20 percent connected Indian banal exchanges. Adani Green Energy besides cancelled a $600m enslaved sale.

Wednesday’s indictment comes much than a twelvemonth aft a US abbreviated seller and forensic auditing firm, Hindenburg Research, accused the Adani Group of banal manipulation and accounting fraud. Hindenburg has a way grounds of investigating companies. As a abbreviated seller, it profits erstwhile the shares of a institution it sells a involvement successful fall.

The US indictment did not clarify if the charges were based connected the Hindenburg allegations.

Opposition parties successful India called for Adani’s apprehension connected Thursday. Raul Gandhi, person of the absorption Congress Party, told reporters connected Thursday that PM Modi was “protecting” his ally, Adani.

Here’s what we cognize astir Adani and the bribery scheme:

India’s absorption Congress Party person Rahul Gandhi, centre, addresses the media connected Indian businessman Gautam Adani successful New Delhi, India, Thursday, November 21, 2024. The representation down Gandhi shows Adani, connected the left, with Indian Prime Minister Narendra Modi, connected the close [Manish Swarup/AP]

What are the charges?

Wednesday’s charges subordinate to violations of the Foreign Corrupt Practices Act, a US anti-bribery law.

Specifically, US prosecutors allege that Adani, 62, and 2 different executives astatine Adani Green Energy, including his nephew Sagar Adani, 30, and a 3rd associate, Vneet S Jaain, promised Indian officials much than $250m successful bribes to concern and unafraid contracts related to a star powerfulness works task with the Indian government.

Prosecutors said the contracts were expected to nutrient much than $2bn successful profits aft taxation implicit astir 20 years. Adani Green Energy besides raised much than $3bn successful loans and bonds from planetary investors based connected mendacious and misleading statements, the prosecutors allege.

Adani personally held meetings with Indian authorities officials betwixt 2020 and 2024 to sermon the bribes, the prosecutors claim. Sagar Adani and Jaain besides allegedly documented details of the bribes connected their phones and photographed documents showing bribe amounts.

Five different Adani associates – Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra, Rupesh Agarwal and Ranjit Gupta – person besides been complaint with related transgression conspiracy. Some of the accused conspired to obstruct justice, prosecutors say.

The associates allegedly concealed grounds by agreeing to delete emails and different physics material. They besides falsely denied their engagement successful the strategy during meetings with US officials successful New York, according to the DOJ. The DOJ did not disclose erstwhile these meetings were held.

All of the defendants are Indian citizens and are believed to unrecorded successful India, but Cyril Cabanes, a dual French-Australian national who prosecutors said lives successful Singapore.

Who is Gautam Adani?

The billionaire is the laminitis and president of the Adani Group, 1 of the largest concern conglomerates successful India. Adani is worthy $69.8bn, according to Forbes magazine, and is the world’s 25th richest and India’s second-richest person.

Adani is simply a autochthonal of Gujarat – the authorities that Prime Minister Narendra Modi is from. As a assemblage dropout, Adani near his father’s textile commercialized to acceptable up a commodities trading concern successful 1988, marking his archetypal solo sojourn into business.

Now, the sprawling Adani conglomerate operates everything from airports to cement production, with astatine slightest 7 Adani Group firms listed connected Indian banal exchanges and immoderate 23,000 radical employed.

The Adani Group controls respective airports, arsenic good arsenic the country’s largest backstage larboard – the Mundra Port successful Gujarat. In January 2023, it led a consortium that bought Israel’s Haifa larboard for $1.15bn.

The Adani Group supplies energy to neighbouring Bangladesh and controls the controversial Carmichael coalmine successful Australia, which is simply a lightning rod for clime alteration activists. It besides owns controlling stakes successful India’s NDTV news.

However, the billionaire’s super-fast emergence successful the concern satellite has been overshadowed by allegations of crony capitalism and is tightly linked to PM Modi’s ain emergence arsenic a politician, analysts say.

Many person accused Adani of benefitting from Modi’s support, dating backmost to erstwhile the PM was the main curate of Gujarat erstwhile Adani bought onshore astatine inexpensive prices. Some besides impeach Indian authorities firms of being complicit successful allegations of corruption that has favoured Adani.

Paranjoy Guha Thakurta, a writer who has investigated Adani, told Al Jazeera that Adani is “extremely adjacent to PM Modi, and that the premier curate has often promoted Adani’s businesses overseas.

“If you way the emergence of Mr Narendra Modi, his governmental career, and you look astatine the emergence of the businesses of the Adani conglomerate, I mean, they match. His proximity [to Modi] is much than what we’ve ever seen before…they are similar duplicate brothers,” helium said.

In the past, Adani has often denied allegations of corruption oregon favouritism. In 2014, for example, erstwhile Modi was campaigning for predetermination arsenic premier curate and utilized a backstage pitchy belonging to Adani, the businessman told reporters that helium was not looking for favours by supporting the politician.

Right now, the Adani Group is facing hurdles successful Bangladesh, wherever officials are mulling an energy proviso declaration agreed nether erstwhile President Sheikh Hasina, an state of Modi. Hasina was ousted successful August aft monolithic youth-led protests broke retired against her government’s plans to unafraid occupation quotas for relatives of veterans who fought successful the independency warfare against Pakistan successful 1971.

In September, Kenyan workers protested astir the group’s intended 30-year lease of the country’s main airport, fearing monolithic layoffs. On Thursday, Kenyan President William Ruto cancelled the deal, pursuing the US indictments.

Workers astatine Jomo Kenyatta International Airport successful Kenya’s superior Nairobi spell connected onslaught to protestation the government’s program to lease the airdrome to the Indian Adani Group, successful Nairobi, Kenya connected September 11, 2024 [Gerald Anderson/Anadolu Agency]

What was the Hindenburg Research report?

In a January 2023 report,  US-based forensic fiscal probe steadfast Hindenburg alleged that the Adani Group had been engaged successful a “brazen banal manipulation and accounting fraud strategy implicit the people of decades”. 

The study was undertaken for the payment of short-sell concern clients and was published connected the website of Hindenburg Research. As a short-sell firm, Hindenburg makes wealth by taking positions successful companies whose values are apt to fall. That diminution tin beryllium hastened erstwhile investigations similar this 1 are published.

Hindenburg claimed it had investigated the Adani Group for 2 years and reviewed thousands of documents, conducted tract visits successful astir fractional a twelve countries and spoken with dozens of individuals including erstwhile elder executives of the conglomerate. Some of the report’s allegations included that:

• Some of Adani’s companies had “substantial debt” and were adjacent to liquidation.
• Adani household members created offshore ammunition entities successful tax-haven jurisdictions including Mauritius, the United Arab Emirates and respective Caribbean islands, generating forged import/export documentation to make fake oregon illegitimate turnover and siphon wealth from the group’s listed companies.
• The Adani Group was utilizing firms successful taxation havens to inflate gross and banal prices to marque its listed entities look much creditworthy.
• The radical had “virtually non-existent fiscal controls” and had changed main fiscal officers 5 times successful 8 years, an accounting reddish flag.
• Shah Dhandaria, an autarkic auditor for immoderate of the Adani Group companies, had nary website and “hardly seems susceptible of analyzable audit work”.

What happened aft the Hindenburg report?

Following the report’s merchandise online, Adani Group’s shares plunged successful value by astir $112bn, and billionaire Adani went from being the world’s third-richest antheral connected Forbes to the 25th now.

In a 413-page rebuttal, the conglomerate denied Hindenburg’s allegations and labelled it a “malicious operation of selective misinformation”.

Opposition parties successful India demanded an probe into state-run companies believed to person concern relations with Adani, specified arsenic the State Bank of India.

The Securities and Exchange Board of India (SEBI) duly launched an investigation. In March 2023, India’s Supreme Court besides acceptable up an autarkic enquiry into the Hindenburg report. However, successful May, the court’s investigative sheet said it had recovered nary grounds of fraud.

In January 2024, the Supreme Court ruled that the conglomerate would not look abstracted investigations by the tribunal based connected the sheet report, though the SEBI probe is ongoing. Following the court’s decision, Adani Group’s shares recovered and, by the extremity of January 2024, Adani was named the richest idiosyncratic successful India, according to Bloomberg.

In August 2024, Hindenburg released a caller report, this clip accusing Madhabi Puri Buch, the chairwoman of the SEBI, of having a struggle of involvement that prevented an in-depth probe into Adani. Buch and her husband, the study alleged, had besides held offshore funds utilized by the Adani Group. The SEBI seat refuted the allegations.

What happens next?

Wednesday’s indictment successful the US is simply a notification of the allegations only, meaning that Adani and his associates are inactive presumed innocent.

Prosecutors present program to manus those warrants to overseas instrumentality enforcement, according to Reuters quality agency.

While the US could effort to person each defendants extradited for a trial, it is unclear if the Indian authorities would let it. Under the extradition pact betwixt the US and India, extraditions tin beryllium made if they are for charges that would effect successful imprisonment for much than 1 twelvemonth successful some countries.

It is unclear erstwhile a proceedings successful the US mightiness commencement oregon if Adani would person to beryllium present.

According to analysts, Adani besides enjoys adjacent ties to US President-elect Donald Trump. Some suggest Trump could enactment a halt to the case, but it’s yet unclear if Trump would privation to beryllium involved, oregon if his powers arsenic president would fto him. In November, pursuing the US elections, Adani congratulated Trump connected his triumph successful a station connected X. He besides promised to put $10bn successful US vigor projects.

Meanwhile, India’s absorption Congress Party person Gandhi has demanded Adani’s apprehension successful India and has besides called retired the SEBI Chair, Buch.

“We request that Adani beryllium instantly arrested,” Gandhi told a quality league successful the capital, Delhi. “But we cognize that won’t happen, arsenic Modi is protecting him.”