Indian billionaire Gautam Adani is facing criminal fraud charges in the US for allegedly orchestrating a $250m (or £198m) bribery scheme to secure renewable energy contracts in India.
Prosecutors claim he and other seven executives bribed officials, concealed the scheme, and misled investors to raise $3bn (or £2.4bn). The investigation, which began in 2022, accuses Mr Adani of obstructing inquiries and furthering the fraud.
Mr Adani, a close ally of Indian prime minister Narendra Modi, denied the allegations.
Asia’s second-richest person, who narrowly escaped death in 2008 as one of many people stuck inside Mumbai’s Taj Mahal Palace Hotel when gunmen went on a killing spree, now faces a US arrest warrant and criminal penalties over the fraud and bribery charges.
Mr Adani’s businesses, spanning industries like power, ports, sugar, and soybeans, lost over $150bn in market value last year after Hindenburg Research accused his group of improper use of offshore tax havens.
Before the stock drop, Mr Adani briefly became the world’s wealthiest person but then was ranked 25th with a net worth of $57.6bn.
Born in Ahmedabad on June 24, 1962, he dropped out of school at 16 and founded Adani Group in 1988. He is married to dentist Priti Adani, and their sons, Karan and Jeet, are involved in the business.
On Wednesday, federal prosecutors in Brooklyn, New York, unsealed the indictment of five counts, accusing Mr Adani and his associates of orchestrating the scheme to secure lucrative solar energy contracts in India.
The contracts, obtained between 2020 and 2024, are expected to generate over $2bn (£1.58bn) in profit.
In a statement released on Thursday, Adani Group said the allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied all wrongdoing. The group’s spokesperson said all possible legal recourse will be sought.
The conglomerate’s spokesperson assured “our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws”.
Billionaire at centre of controversy
Last year, Mr Adani, once the world’s second-richest man, faced an unprecedented challenge that rocked the Indian business world and wiped out billions of dollars from his wealth.
The billionaire’s companies lost close to $75bn in the span of just one week and dropped out of the top 10 list in the Forbes Billionaires Index. In the process, Mr Adani was overtaken by longtime rival Mukesh Ambani as Asia’s richest man.
The sudden fall in the wealth of Asia’s richest man, known for his meteoric rise and close ties with prime minister Narendra Modi, came after an activist investment firm released a report accusing his company Adani Group of pulling the “largest con in corporate history”.
The report alleged “brazen” stock manipulation and accounting fraud worth $218bn” by the multinational conglomerate, active in resources, logistics and energy, wiping billions from the personal net worth of Mr Adani.
The sharp fall in stocks and allegations raised concerns over the vast amount of investments made by Indian public sector companies in Mr Adani’s businesses, amid fears that it could end up affecting the fortunes of millions of Indians.
Here’s a look at who Mr Adani is, what are the latest allegations against him, and how his fall could impact the wealth of Indian citizens.
Who is Adani?
The 62-year-old business tycoon built his empire starting as a humble plastics trader in Gujarat, also the home state of Mr Modi where he was elected as the chief minister three times.
Mr Adani’s fortunes began to take shape soon after India’s liberalisation in 1990s, when he was tasked with developing a deep-water port at Mundra, which now hosts the largest commercial port in the country.
Since then, Adani Group has seen a meteoric rise, expanding into infrastructure, logistics and energy, often inviting questions from crticis over his closeness with Mr Modi.
Mr Adani made headlines around the world last year when he briefly surpassed Jeff Bezos as the world’s second-richest man, becoming the face of India’s fast-growing economy.
Over the years, there have been several allegations against Mr Adani, including of cronyism, as his firms have won many Indian energy and infrastructure government contracts.
What are the US charges against him
“As alleged, the defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars and Gautam S Adani, Sagar R Adani and Vneet S Jaain lied about the bribery scheme as they sought to raise capital from US and international investors,” US attorney Breon Peace said on Wednesday.
The other defendants named by US prosecutors are Ranjit Gupta and Rupesh Agarwal, former executives of a renewable energy firm listed in the US, and Cyril Cabanes, Saurabh Agarwal and Deepak Malhotra, employees of a Canadian institutional investor.
They are accused of conspiring to obstruct investigations by a grand jury, the FBI and the US Securities and Exchange Commission by destroying evidence, withholding information during an internal inquiry, and falsely denying involvement in the bribery scheme during meetings with US authorities.
“On several occasions, Gautam S Adani personally met with an Indian government official to advance the bribery scheme and the defendants held in-person meetings with each other to discuss aspects of its execution. The defendants frequently discussed their efforts in furtherance of the bribery scheme, including through an electronic messaging application,” the US Attorney’s Office, Eastern District of New York said in a statement.
What happened to Adani Group’s stocks?
Hindenburg Research, an activist investment firm, published a report earlier this year that accused the Adani Group of, among other things, artificially boosting the share prices of its firms over several decades by using a network of overseas shell companies linked to Mr Adani’s family members.
Hindenburg argued that Mr Adani’s companies were collectively overvalued on India’s stock market by more than 80 per cent. The news set the stock market price of his company into a freefall, with many observers, who have long raised questions over the company’s valuations, raising concerns over the public investments made in the Adani Group.
Mr Adani’s net worth fell by $8.21bn to $84.4bn then amid the fallout from the allegations. It was reported at the time that since 1 January, he has lost $36.1bn from his net worth.
Why Adani matters to the Indian taxpayer
The sharp fall in stocks of Adani Group raised concerns over the high exposure of the state-owned insurance company, the Life Insurance Corporation (LIC), and India’s largest lender State Bank of India (SBI), to Adani Group companies.
LIC, a company on which a large number of Indian citizens rely for their insurance, has invested heavily in the Adani Group in the last few years. The insurer accounts for over 98 per cent of the entire insurance industry’s investment in the Adani Group, raising fears that the massive losses that the conglomerate is suffering will impact the state-owned company.
Indian banks have an exposure of around Rs 80,000 crore (£7.92bn) to the Adani Group, which is 38 per cent of the group’s total debt. One of the largest lenders, SBI, has defended itself by saying that its exposure to the Adani Group was well below the RBI’s Large Exposure Framework and was secured by cash-generating assets.
However, it did not specify the amount of exposure to the company. At the time, it was reported that in five trading sessions, LIC’s stock saw an almost 15 per cent drop while SBI witnessed a 10 per cent decline.
What happens now
In Mr Adani’s case, the next step following the indictment is likely the “arraignment” stage. During this phase, a judge will formally present the charges and determine whether bail will be granted to the accused. The defendants will then decide whether to plead guilty or not guilty. If they plead not guilty, the case will move forward to a jury trial.
Reuters reported that prosecutors are expected to forward the arrest warrants to foreign law enforcement agencies.
Reaction in India
The opposition Congress Party has reiterated its demand for a Joint Parliamentary Committee (JPC) probe into the various “scams” linked to the Adani Group.
In a post on X, Congress communications in-charge Jairam Ramesh stated that the indictment “vindicates” the call for a JPC investigation. He also urged the appointment of “a new and credible” SEBI chief to ensure the completion of securities law investigations into the “Adani Mega Scam”.
