ADANI GROUP AT A CROSSROADS

AS LEGAL CHALLENGES MOUNT AMID A U.S. INDICTMENT, WILL GAUTAM ADANI WEATHER THE STORM, OR WILL IT REDEFINE HIS EMPIRE'S GLOBAL AMBITIONS?

- MANOJ SHARMA

THE INDICTMENT of Gautam Adani and seven others in a U.S. court in an alleged $2-billion bribery scheme has shaken the ₹1.75-lakh-crore empire, hurting its operations. As alleged in the indictment, Adani Group paid more than $250 million as bribes to Indian government officials to obtain solar energy contracts, and concealed it from U.S. investors. Adani Group has dismissed the allegations as “baseless”.

On November 20, the United States Department of Justice (U.S. DoJ) and the United States Securities and Exchange Commission (U.S. SEC) issued a ‘criminal indictment’ and brought a civil complaint, respectively, against Gautam Adani and his nephew Sagar Adani. The U.S. DoJ also included Adani Green director Vneet Jaain in the criminal indictment. Reacting to various reports in the matter, especially about the alleged Foreign Corrupt Practices Act (FCPA) violation in the indictment, Adani Green Energy Ltd., which has been at the centre of the controversy, issued a statement saying the charges against its three directors, including the chairman, related to three counts of ‘criminal indictment’ but not ‘alleged FCPA violations’. The company clarified that these directors have been charged with three counts in the criminal indictment: Alleged securities fraud conspiracy, alleged wire fraud conspiracy, and alleged securities fraud. The conglomerate has pledged to take legal action.

Following the U.S. indictment order, around $30 billion was wiped out from 11 listed Adani Group companies a day after (November 21), as group stocks tumbled—reminiscent of January 2023, when U.S. short-seller Hindenburg’s report accused it of a ‘lack of governance’ and ‘use of tax havens’. It took Adani companies around a year to recover from the Hindenburg effect, through its focus on extensive strategic capital-raising initiatives.