Gautam Adani Faces Securities Fraud Allegations, Not FCPA Charges: Adani Group Clarifies

Billionaire Gautam Adani, his nephew Sagar Adani, and key executive Vneet Jaain have been charged in the United States for alleged securities violations but not under the Foreign Corrupt Practices Act (FCPA), according to the Adani Group. In a statement issued on November 27, the company dismissed claims of FCPA violations as inaccurate and reiterated its stance that the allegations were baseless.

Criminal Charges Against  Adani

The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have filed a criminal indictment and civil complaint in a New York court against Adani and two executives. The charges include:

1. Securities fraud conspiracy,
2. Wire fraud conspiracy, and
3. Securities fraud.

The DOJ alleges that senior executives at Adani Green Energy Ltd., Azure Power, and other entities orchestrated a $265 million bribery scheme to secure solar energy contracts yielding $2 billion in profits over two decades. The civil complaint also accuses the executives of misrepresenting anti-bribery practices to U.S.-based investors.

However, Gautam Adani and his team have not been charged under the FCPA or with obstructing justice, as noted in Counts 1 and 5 of the DOJ’s indictment.

Adani Group Denies Allegations

The Adani Group firmly denies any wrongdoing, calling the allegations part of a politically motivated campaign. The company plans to pursue all legal remedies to contest the charges. In a stock exchange filing, Adani Green Energy emphasized that penalties under the securities violations, if any, would involve monetary fines, not criminal convictions.

The indictment has triggered significant financial and reputational repercussions for the Adani Group:

• Market Capitalization Loss: Adani companies have seen a $54 billion decline in market value since the charges were announced.
• Credit Downgrades: Agencies like Moody’s and Fitch have revised their outlooks on several Adani firms, reflecting growing investor concerns.
• Green Bond Withdrawal: Adani Green Energy withdrew a $600 million green bond offering, citing investor protection amid potential market volatility.

The allegations have also strained Adani’s global business relationships:

• TotalEnergies: The French energy major has paused new investments in Adani firms, citing the legal uncertainties.
• US International Development Finance Corporation (DFC): The DFC is reassessing its $550 million loan to an Adani-led port development project in Colombo, Sri Lanka.
• GQG Partners: The investment firm, a major Adani stakeholder, has experienced financial setbacks due to the market downturn.
• Jefferies: The U.S. investment bank is reconsidering its association with the Adani Group amid reputational and compliance concerns.

Also Read: Congress Should Stay Away From Adani Case and Manipur Issues’: Adv Jethmalani