A US federal court indicted Indian business magnate Gautam Adani and seven others on charges of alleged bribery and fraud last Wednesday, November 20. Adani, one of the world’s richest people, faces accusations linked to a deal between Adani Green Energy and a US firm to supply 12 gigawatts of solar power to various Indian states. The agreement was expected to generate billions of dollars in US investments for Adani’s solar power project.
A press release from the US Attorney’s office says that there is a “five count criminal” indictment against Gautam Adani, his nephew Sagar Adani, and Vinnet Jain, “with conspiracies to commit securities and wire fraud” with a scheme to “obtain funds from the US investors and global financial institutions on the basis of false and misleading statements.”
Adani and others are accused of allegedly promising over USD 250 million in bribes to Indian government officials to secure solar energy contracts. They are also accused of misleading US investors by falsely claiming a “zero tolerance” policy for such practices to raise billions of dollars. Furthermore, the indictment includes charges of obstructing justice. The press release says that the “criminal division will continue to aggressively prosecute the corrupt, deceptive and obstructive conduct that violates US law, no matter where in the world it occurs.”
Following news of the indictment, India’s opposition parties demanded the immediate arrest of Gautam Adani, citing his close ties to the ruling Bharatiya Janata Party (BJP) and the country’s far-right Prime Minister Narendra Modi.
The Communist Party of India (Marxist) issued a statement demanding that Adani face corruption charges, alleging that “his business empire has had the full protection of the Modi government to execute his unlawful and criminal activities.” Similarly, the Congress party, India’s largest opposition group, also called for Adani’s arrest, reiterating allegations that the ruling BJP has protected the corporate giant due to its shared benefits from Adani’s empire.
Hindenburg reports
Adani is a multibillion group of companies working in various sectors including energy, mining, ports, and defense. Gautam Adani is currently Asia’s second richest man, with a total worth of over USD 100 billion.
Opposition parties in India have been pointing out the favoritism of the BJP government towards Adani and allege that this support has contributed to its fast rise since 2014. They have highlighted how Adani has been funding election campaigns of the ruling Hindu supremacist party in return for getting preferential treatment in the allocation of contracts and fast clearance of its projects. Gautam Adani has recently been accused of direct political interference in government formation in India’s second biggest state of Maharashtra as well. There are several accusations against him of violations of environmental laws, and other corrupt practices.
Following the indictment in the US, opposition parties reiterated their calls for an inquiry into the allegations against Gautam Adani made last year. Adani has faced accusations of money laundering and fraud in successive reports by Hindenburg Research: a report published in January, titled “Adani Group: How the World’s Richest Man is Pulling the Largest Con in Corporate History,” alleged that Adani manipulated stock markets and engaged in accounting fraud to conceal the financial health of certain group companies from potential investors.
In August this year, Hindenburg Research published another report, accusing Madhabi Puri Buch, head of India’s stock market regulator Securities and Exchange Board of India (SEBI), of having stakes in Adani’s dubious offshore entities and being complicit in artificially inflating the Adani group’s shares.
The recent indictment confirms parts of the Hindenburg reports, opposition leaders claimed, demanding that the government stop shielding the corporate giant from the legal consequences of his actions. The Adani group denied the allegations and called them baseless. It also withdrew the USD 600 million bond offerings in the US scheduled to be launched on Thursday.
Adani’s international projects have a checkered record too
There have been several allegations against Adani’s international projects in countries such as Sri Lanka, Australia and Kenya.
In Sri Lanka, there is an allegation that the previous government led by Mahida Rajapaksha was coerced by Prime Minister Modi to grant a contract for over USD 440 million wind power project to Adani. The new government in Sri Lanka, led by socialist Anura Kumara Dissanayake, has hinted that it will reconsider the approval.
The project has faced criticism from local activists and economists over its lack of transparency in the bidding process, high power tariffs, and potential environmental impact. During his presidential campaign in September, Dissanayake had called the Adani project a potential threat to Sri Lanka’s energy sovereignty.
Adani’s massive Charmichael coal mine in Queensland, Australia, has faced several legal and political challenges over allegations of bypassing local communities and its possible environmental impact. The project has also been accused of using illegal measures to secure approvals.
Similarly, the group’s two projects in Kenya – the airport expansion in Nairobi and a high voltage power transmission project – had sparked popular protests earlier this year, with the opposition alleging a complete lack of transparency in approvals.
Former Kenyan Prime Minister Raila Odinga claimed that he was personally introduced to Adani by PM Narendra Modi during Modi’s tenure as Chief Minister of Gujarat. This claim has substantiated the Indian opposition’s claims that Modi has been promoting Adani’s business ventures during his foreign trips as Prime Minister.
