Why has Indian billionaire Gautam Adani been charged in a US bribery case?

United States prosecutors indicted billionaire Gautam Adani, 1 of nan world’s richest people, connected Wednesday complete his alleged lead domiciled successful a bribery strategy linked to a mega-sized star powerfulness plant.

In a statement, nan US Department of Justice (DOJ) alleged that Adani – a adjacent state of India’s Prime Minister Narendra Modi – and 7 of his associates, including his nephew Sagar Adani, promised Indian officials much than $250m successful bribes to unafraid power contracts being funded by world investors, including immoderate from nan US.

On Thursday, nan Adani Group denied nan allegations and called nan indictment a “baseless move”. The group said it has “steadfastly maintained nan highest imaginable standards of governance and transparency” and would activity “all imaginable ineligible recourse”.

Adani Group companies mislaid astir $28bn successful marketplace worth connected Thursday greeting pursuing nan indictment arsenic shares successful nan group’s listed firms fell by betwixt 10 and 20 percent connected Indian banal exchanges. Adani Green Energy besides cancelled a $600m enslaved sale.

Wednesday’s indictment comes much than a twelvemonth aft a US short seller and forensic auditing firm, Hindenburg Research, accused nan Adani Group of banal manipulation and accounting fraud. Hindenburg has a way grounds of investigating companies. As a short seller, it profits erstwhile nan shares of a institution it sells a liking successful fall.

The US indictment did not explain if nan charges were based connected nan Hindenburg allegations.

Opposition parties successful India called for Adani’s apprehension connected Thursday. Raul Gandhi, leader of nan guidance Congress Party, told reporters connected Thursday that PM Modi was “protecting” his ally, Adani.

Here’s what we cognize astir Adani and nan bribery scheme:

India’s guidance Congress Party leader Rahul Gandhi, centre, addresses nan media connected Indian businessman Gautam Adani successful New Delhi, India, Thursday, November 21, 2024. The image down Gandhi shows Adani, connected nan left, pinch Indian Prime Minister Narendra Modi, connected nan correct [Manish Swarup/AP]

What are nan charges?

Wednesday’s charges subordinate to violations of nan Foreign Corrupt Practices Act, a US anti-bribery law.

Specifically, US prosecutors allege that Adani, 62, and 2 different executives astatine Adani Green Energy, including his nephew Sagar Adani, 30, and a 3rd associate, Vneet S Jaain, promised Indian officials much than $250m successful bribes to finance and unafraid contracts related to a star powerfulness works task pinch nan Indian government.

Prosecutors said nan contracts were expected to nutrient much than $2bn successful profits aft taxation complete astir 20 years. Adani Green Energy besides raised much than $3bn successful loans and bonds from world investors based connected mendacious and misleading statements, nan prosecutors allege.

Adani personally held meetings pinch Indian authorities officials betwixt 2020 and 2024 to talk nan bribes, the prosecutors claim. Sagar Adani and Jaain besides allegedly documented specifications of nan bribes connected their phones and photographed documents showing bribe amounts.

Five different Adani associates – Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra, Rupesh Agarwal and Ranjit Gupta – person besides been complaint pinch related criminal conspiracy. Some of nan accused conspired to obstruct justice, prosecutors say.

The associates allegedly concealed grounds by agreeing to delete emails and different physics material. They besides falsely denied their engagement successful nan strategy during meetings pinch US officials successful New York, according to nan DOJ. The DOJ did not disclose erstwhile these meetings were held.

All of nan defendants are Indian citizens and are believed to unrecorded successful India, isolated from Cyril Cabanes, a dual French-Australian national who prosecutors said lives successful Singapore.

Who is Gautam Adani?

The billionaire is nan laminitis and president of nan Adani Group, 1 of nan largest business conglomerates successful India. Adani is worthy $69.8bn, according to Forbes magazine, and is nan world’s 25th richest and India’s second-richest person.

Adani is simply a autochthonal of Gujarat – nan authorities that Prime Minister Narendra Modi is from. As a assemblage dropout, Adani near his father’s textile waste and acquisition to group up a commodities trading business successful 1988, marking his first solo sojourn into business.

Now, nan sprawling Adani conglomerate operates everything from airports to cement production, pinch astatine slightest 7 Adani Group firms listed connected Indian banal exchanges and immoderate 23,000 group employed.

The Adani Group controls respective airports, arsenic good arsenic nan country’s largest backstage larboard – nan Mundra Port successful Gujarat. In January 2023, it led a consortium that bought Israel’s Haifa larboard for $1.15bn.

The Adani Group supplies energy to neighbouring Bangladesh and controls nan controversial Carmichael coalmine successful Australia, which is simply a lightning rod for ambiance alteration activists. It besides owns controlling stakes successful India’s NDTV news.

However, nan billionaire’s super-fast emergence successful nan business world has been overshadowed by allegations of crony capitalism and is tightly linked to PM Modi’s ain emergence arsenic a politician, analysts say.

Many person accused Adani of benefitting from Modi’s support, making love backmost to erstwhile nan PM was nan main curate of Gujarat erstwhile Adani bought onshore astatine inexpensive prices. Some besides impeach Indian authorities firms of being complicit successful allegations of corruption that has favoured Adani.

Paranjoy Guha Thakurta, a journalist who has investigated Adani, told Al Jazeera that Adani is “extremely adjacent to PM Modi, and that nan premier curate has often promoted Adani’s businesses overseas.

“If you way nan emergence of Mr Narendra Modi, his governmental career, and you look astatine nan emergence of nan businesses of nan Adani conglomerate, I mean, they match. His proximity [to Modi] is much than what we’ve ever seen before…they are for illustration copy brothers,” he said.

In nan past, Adani has often denied allegations of corruption aliases favouritism. In 2014, for example, erstwhile Modi was campaigning for predetermination arsenic premier curate and utilized a backstage pitchy belonging to Adani, nan businessman told reporters that he was not looking for favours by supporting nan politician.

Right now, nan Adani Group is facing hurdles successful Bangladesh, wherever officials are mulling an energy proviso statement agreed nether erstwhile President Sheikh Hasina, an state of Modi. Hasina was ousted successful August aft monolithic youth-led protests collapsed retired against her government’s plans to unafraid occupation quotas for relatives of veterans who fought successful nan independency warfare against Pakistan successful 1971.

In September, Kenyan workers protested astir nan group’s intended 30-year lease of nan country’s main airport, fearing monolithic layoffs. On Thursday, Kenyan President William Ruto cancelled nan deal, pursuing nan US indictments.

Workers astatine Jomo Kenyatta International Airport successful Kenya’s superior Nairobi spell connected onslaught to protestation nan government’s scheme to lease nan airdrome to nan Indian Adani Group, successful Nairobi, Kenya connected September 11, 2024 [Gerald Anderson/Anadolu Agency]

What was nan Hindenburg Research report?

In a January 2023 report,  US-based forensic financial investigation patient Hindenburg alleged that nan Adani Group had been engaged successful a “brazen banal manipulation and accounting fraud strategy complete nan people of decades”. 

The study was undertaken for nan use of short-sell finance clients and was published connected nan website of Hindenburg Research. As a short-sell firm, Hindenburg makes money by taking positions successful companies whose values are apt to fall. That diminution tin beryllium hastened erstwhile investigations for illustration this 1 are published.

Hindenburg claimed it had investigated nan Adani Group for 2 years and reviewed thousands of documents, conducted tract visits successful almost half a twelve countries and spoken pinch dozens of individuals including erstwhile elder executives of nan conglomerate. Some of nan report’s allegations included that:

• Some of Adani’s companies had “substantial debt” and were adjacent to liquidation.
• Adani family members created offshore ammunition entities successful tax-haven jurisdictions including Mauritius, nan United Arab Emirates and respective Caribbean islands, generating forged import/export archiving to create clone aliases illegitimate turnover and siphon money from nan group’s listed companies.
• The Adani Group was utilizing firms successful taxation havens to inflate gross and banal prices to make its listed entities look much creditworthy.
• The group had “virtually non-existent financial controls” and had changed main financial officers 5 times successful 8 years, an accounting reddish flag.
• Shah Dhandaria, an independent auditor for immoderate of nan Adani Group companies, had nary website and “hardly seems tin of analyzable audit work”.

What happened aft nan Hindenburg report?

Following nan report’s merchandise online, Adani Group’s shares plunged successful value by astir $112bn, and billionaire Adani went from being nan world’s third-richest man connected Forbes to nan 25th now.

In a 413-page rebuttal, nan conglomerate denied Hindenburg’s allegations and labelled it a “malicious operation of selective misinformation”.

Opposition parties successful India demanded an investigation into state-run companies believed to person business relations pinch Adani, specified arsenic nan State Bank of India.

The Securities and Exchange Board of India (SEBI) duly launched an investigation. In March 2023, India’s Supreme Court besides group up an independent enquiry into nan Hindenburg report. However, successful May, nan court’s investigative sheet said it had recovered nary grounds of fraud.

In January 2024, nan Supreme Court ruled that nan conglomerate would not look abstracted investigations by nan tribunal based connected nan sheet report, though nan SEBI probe is ongoing. Following nan court’s decision, Adani Group’s shares recovered and, by nan extremity of January 2024, Adani was named nan richest personification successful India, according to Bloomberg.

In August 2024, Hindenburg released a caller report, this clip accusing Madhabi Puri Buch, nan chairwoman of nan SEBI, of having a conflict of liking that prevented an in-depth probe into Adani. Buch and her husband, nan study alleged, had besides held offshore costs utilized by nan Adani Group. The SEBI chair refuted nan allegations.

What happens next?

Wednesday’s indictment successful nan US is simply a notification of nan allegations only, meaning that Adani and his associates are still presumed innocent.

Prosecutors now scheme to manus those warrants to overseas rule enforcement, according to Reuters news agency.

While nan US could effort to person each defendants extradited for a trial, it is unclear if nan Indian authorities would let it. Under nan extradition pact betwixt nan US and India, extraditions tin beryllium made if they are for charges that would consequence successful imprisonment for much than 1 twelvemonth successful some countries.

It is unclear erstwhile a proceedings successful nan US mightiness commencement aliases if Adani would person to beryllium present.

According to analysts, Adani besides enjoys adjacent ties to US President-elect Donald Trump. Some propose Trump could put a extremity to nan case, but it’s yet unclear if Trump would want to beryllium involved, aliases if his powers arsenic president would fto him. In November, pursuing nan US elections, Adani congratulated Trump connected his triumph successful a station connected X. He besides promised to put $10bn successful US power projects.

Meanwhile, India’s guidance Congress Party leader Gandhi has demanded Adani’s apprehension successful India and has besides called retired nan SEBI Chair, Buch.

“We request that Adani beryllium instantly arrested,” Gandhi told a news convention successful nan capital, Delhi. “But we cognize that won’t happen, arsenic Modi is protecting him.”