Gautam Adani — the Indian billionaire with ambitions to be one of the world’s biggest green energy players — has been charged in the US with helping orchestrate a $250m-plus bribery campaign to win renewable power contracts, throwing his businesses into turmoil.
Shares in the companies forming Adani’s sprawling business empire crashed today in Mumbai, with those of Adani Enterprises — which owns green hydrogen producer and electrolyser maker Adani New Industries — falling by more than 23% at time of going to press.
Among other investments, Adani plans to spend $50bn on green hydrogen over the next decade, having successfully won subsidies for both H2 production and electrolyser manufacturing from the Indian government.
The conglomerate has also reportedly been courting international banks for $3bn in project finance for a sprawling complex in Gujarat, capable of producing three million tonnes of hydrogen a year with start-up in 2027.
However, on Wednesday, Gautum Adani and seven others were indicted by federal prosecutors in the US for fraud over allegations that they took part in “a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions on the basis of false and misleading statements”.
The US prosecutors claim the billionaire businessman and others hatched “an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars and... lied about the bribery scheme as they sought to raise capital from US and international investors”.
The accused executives planned to pay more than $250m in bribes to obtain solar supply contracts with the Indian government “which were projected to generate more than $2bn in profits after tax over an approximately 20-year period”, said a statement from the federal prosecutors.
“Gautam Adani and seven other business executives allegedly bribed the Indian government to finance lucrative contracts designed to benefit their businesses. Adani and other defendants also defrauded investors by raising capital on the basis of false statements about bribery and corruption, while still other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government’s investigation,” they added.
A parallel action was also launched by the US Securities and Exchange Commission (SEC), which charged Gautam Adani and his nephew Sagar Adani, executive of renewables developer Adani Green Energy Ltd, and Cyril Cabanes, an executive of independent power producer Azure Power Global Ltd, “for conduct arising out of a massive bribery scheme”.
The SEC said: “According to the SEC’s complaint, Gautam and Sagar Adani orchestrated a bribery scheme that involved paying or promising to pay the equivalent of hundreds of millions of dollars in bribes to Indian government officials to secure their commitment to purchase energy at above-market rates that would benefit Adani Green and Azure Power.”
Adani Green said in a statement to the Mumbai Exchange: “Adani Group states that the allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied. All possible legal recourse will be sought.
“The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations. We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws.”
News of the indictments is a major new blow to the Adani Group, which early last year found itself the target of separate claims of malpractice by US research group Hindenburg Group, which it fiercely denied.
A version of this article was originally published in Hydrogen Insight's sister publication, Recharge.
