Gautam Adani and Executives Charged in Massive Bribery Scheme Linked to Solar Energy Contracts

Eight business executives, including Gautam Adani, the billionaire CEO of Indian conglomerate Adani Group, have been charged by the U.S. Department of Justice (DOJ) in connection with an alleged multi-million dollar bribery scheme to secure solar energy contracts in India. The DOJ alleges that Adani and his associates orchestrated a scheme of astonishing scale, involving over $250 million in bribes to obtain lucrative contracts for one of the world’s largest solar energy projects.

The DOJ’s charges accuse Adani, two other Adani Group executives, and five individuals from associated entities of orchestrating the payments over a four-year period. The alleged bribes were intended to secure contracts that would have generated an estimated $2 billion in profits over 20 years, with electricity sold to the Indian government at rates above market prices.

In a parallel investigation, the U.S. Securities and Exchange Commission (SEC) filed charges against Gautam Adani, his nephew Sagar Adani—an executive at Adani Green Energy—and a third individual, accusing them of securities and wire fraud. The SEC alleges that Gautam and Sagar Adani led the bribery scheme while raising funds with “offering materials [that] included statements about its anti-corruption and anti-bribery efforts that were materially false or misleading.”

To contextualize the scale of the alleged misconduct, the DOJ pointed to previous Foreign Corrupt Practices Act (FCPA) cases. For example, Gunvor, a Swiss oil trader, paid $97 million in bribes to win oil contracts in Ecuador and was fined $661 million earlier this year. Similarly, Raytheon paid $30 million in bribes to secure military contracts in Qatar and was fined $268 million. The DOJ estimates the Adani Group’s alleged bribery scheme to be nearly double the scale of Sweden-based Ericsson’s historic $1 billion penalty for bribery schemes in seven countries over 17 years. However, unlike these cases where profits were collected, the DOJ’s figure for the Adani Group represents projected earnings from contracts that had not yet been fulfilled.

The individuals charged include Adani Group executives Gautam Adani, Sagar Adani, and Vneet Jaain, as well as Ranjit Gupta and Rupesh Agarwal, former executives of a renewable energy company. Also charged were Cyril Cabanes, Saurabh Agarwal, and Deepak Malhotra, former employees of a Canadian institutional investor linked to Azure Power Global. The DOJ accused Cabanes, Saurabh Agarwal, Malhotra, and Rupesh Agarwal of obstruction of justice, alleging they deleted emails, messages, and analyses related to the scheme and withheld material information during corporate investigations and inquiries by the DOJ, SEC, FBI, and a grand jury.

The DOJ did not disclose the names of the companies employing the defendants. A spokesperson for the U.S. Attorney’s Office for the Eastern District of New York stated that Gautam Adani’s whereabouts remain unknown, and none of the individuals charged have been arrested.

In response, the Adani Group released a statement denying the accusations, stating, “The allegations made by the [DOJ] and the [SEC] against directors of Adani Green are baseless and denied,” and emphasizing that the company is a “law-abiding organization, fully compliant with all laws.”

The charges come nearly a year after short-seller Hindenburg Research published a report in January 2023 accusing the Adani Group of engaging in a “brazen stock manipulation and accounting fraud scheme over the course of decades.” That report caused a sharp decline in the company’s market value, wiping out $47 billion, according to The Wall Street Journal.

Following the DOJ’s announcement, Adani Group companies collectively lost $27 billion in market value on Thursday, bringing their combined market capitalization down to $142 billion, according to Reuters.

By fLEXI tEAM