The U.S. Securities and Exchange Commission (SEC) has issued a summons to Gautam Adani, the chairman of the Adani Group, following allegations of involvement in a bribery scheme. The SEC filed a lawsuit against Adani and his nephew Sagar Adani, accusing them of participating in a corruption scandal involving hundreds of millions of dollars to influence a bond offering. The lawsuit claims that the Adanis falsely claimed their companies adhered to anti-bribery laws during a $750 million bond offering.
SEC’s Legal Action and Charges
The SEC’s lawsuit seeks significant monetary penalties and restrictions that could prevent the Adanis from holding leadership roles in publicly listed companies. According to the filing, the Adani Group and its representatives are required to respond to the summons within 21 days.
The Adani Group has strongly denied the bribery charges, describing them as “baseless.” The group’s CFO has emphasized that the allegations pertain only to a single contract related to Adani Green Energy, which comprises about 10% of the group’s business, and that no other companies under the Adani Group have been implicated in wrongdoing.
Allegations of Bribery to Secure Power Contracts
Federal prosecutors have also issued arrest warrants for Gautam Adani and Sagar Adani in connection with a $265 million bribery operation aimed at securing key power-supply deals in India. The contracts were tied to the development of one of India’s largest solar power plants, expected to generate $2 billion in profits over the next 20 years. This bribery scheme, which allegedly involved corrupt payments to Indian government officials, has caused significant fallout for the Adani Group. The company’s market value has taken a major hit, and several high-profile international projects have been canceled.
Timeline of Alleged Bribery Activities
The allegations date back to June 2020, when Adani Green Energy won a major solar development bid—described as the largest solar development agreement ever awarded. Under the agreement, Adani Green Energy was tasked with supplying 8 gigawatts of electricity to a state-run power company. However, local power companies were reportedly reluctant to pay the agreed-upon prices, which put the deal at risk. To ensure the deal went through, Gautam Adani is accused of bribing local officials to influence their decision to purchase electricity at the set rates.
This bribery scheme is central to the criminal and civil charges now facing Gautam Adani. The billionaire, who is currently believed to be in India, is not under U.S. custody, but the SEC and U.S. Department of Justice are continuing their investigation into the matter.
Impact on the Adani Group
The bribery scandal is the second significant crisis for the Adani Group in just two years. The company, which operates across diverse sectors such as ports, power, and energy, has seen its market capitalization drop by billions of dollars due to the ongoing legal troubles. The Adani Group has also faced international setbacks, with Kenya’s government canceling a major airport project after the bribery scandal came to light.
As the SEC and other U.S. authorities continue to investigate the case, the legal and financial ramifications for Gautam Adani and his empire are expected to escalate. The group’s involvement in multiple transactions raising funds from U.S.-based investors from 2021 onwards is now under heavy scrutiny.