Indian billionaire Gautam Adani was charged by US prosecutors for his alleged involvement in a $265-million bribery scheme, according to Reuters.
Multiple fraud allegations against Adani, one of the world’s richest men, and seven other defendants caused his companies’ stocks and bonds to plunge on Thursday. Adani Green Energy, the company targeted by the allegations, also cancelled a $600-million bond sale.
The charges followed a major upheaval at the Adani Group last year after Hindenburg Research released a report accusing it of misusing offshore tax havens. US federal prosecutors said the defendants agreed to bribe Indian government officials to win contracts that were expected to generate $2 billion in profits over 20 years.
They also alleged that Adani and another executive of the former Adani Green Energy CEO, Vneet Jaain, raised more than $3 billion in loans and bonds while hiding their corruption from lenders and investors. The three were charged with securities fraud, conspiracy to commit securities fraud and conspiracy to commit e-fraud. The US Securities and Exchange Commission (SEC) stated:
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 US investors. 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.
Stocks plunging amid allegations
Shares in Adani Green Energy fell 17%, with shares in many of the conglomerate’s other companies losing more than 10%. The group lost $28 billion in value in trading on Thursday, taking the combined market capitalisation of its companies to $141 billion. Before last year’s Hindenburg report, the group enjoyed a market value of $235 billion.
Meanwhile, political opponents accused prime minister Narendra Modi’s administration of favouring Adani in government decisions. On Thursday, India’s Congress party repeated calls for a parliamentary enquiry into alleged wrongdoing by the Adani Group.
Five other defendants were charged with conspiracy to violate the Foreign Corrupt Practices Act, a US anti-bribery law, and four were charged with conspiracy to obstruct justice. However, none of the defendants were in custody, a spokesperson for US Attorney Breon Peace in Brooklyn said.
Shares in GQG Partners, an Australian-listed investment company that was a major backer of Adani, also fell 20%, the biggest one-day drop since it listed three years ago.
Gautam Adani’s fortune is estimated at $69.8bn according to Forbes, which makes him the second richest person in India after Mukesh Ambani.
