Billionaire Gautam Adani charged in US over massive bribery scheme

Billionaire Indian industrialist Gautam Adani has been charged with paying hundreds of millions of dollars of bribes and hiding the payments from investors, US prosecutors said on Wednesday.

With a business empire spanning coal, airports, cement and media, the chairman of Adani Group has been rocked in recent years by corporate fraud allegations and a stock crash.

The close acolyte of Indian Prime Minister Narendra Modi, a fellow Gujarat native, is alleged to have agreed to pay more than $250 million in bribes to Indian officials for lucrative solar energy supply contracts.

The deals were projected to generate more than $2 billion in profits after tax, over roughly 20 years.

Prosecutors also said the Adanis and another executive at Adani Green Energy ADNA.NS, former CEO Vneet Jaain, raised more than $3 billion in loans and bonds by hiding their corruption from lenders and investors.

None of the multiple defendants in the case, including Adani, are in custody, the prosecutor's office told AFP.

Prosecutors say one of Adani's alleged accomplices meticulously tracked bribe payments, using his phone to log the bungs offered to officials.

"This indictment alleges schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice," said Deputy Assistant Attorney General Lisa Miller.

"Gautam Adani and seven other business executives allegedly bribed the Indian government to finance lucrative contracts designed to benefit their businesses... while still other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government's investigation," said the FBI's James Dennehy.

Adani Enterprises tanks after US

Shares in Adani Enterprises slumped 10% on Thursday after news of the charges against Adani.

The steep losses in the Adani group's key firm was matched by heavy selling in its other key businesses, with Adani Power losing 11% and Adani Energy Solutions tanking 20%.

Adani Green Energy ADNA.NS also cancelled plans on Thursday to raise $600 million in U.S. dollar-denominated bonds. The bond had been priced but was pulled following the news.

Adani dollar bonds slumped in Asian trading, with prices down between 3-5c on bonds for Adani Ports and Special Economic Zone US00652MAJ18=TE. The falls were the largest since the Adani Group came under a short-seller attack in February 2023.

According to an indictment, some conspirators referred privately to Gautam Adani with the code names "Numero uno" and "the big man," while Sagar Adani allegedly used his cellphone to track specifics about the bribes.

The Adani Group has not responded to requests for comment, according to Reuters.

Shares in GQG Partners GQG.AX, an Australia-listed investment firm that is a major Adani backer, slid 20%. The decline was the stock's largest one-day fall since it listed three years ago.

GQG last year bought 3.4% of Adani Enterprises ADEL.NS - the group's flagship firm, 4.1% of Adani Ports and Special Economic Zone APSE.NS, 2.5% of Adani Transmission and 3.5% of Adani Green Energy. It said in a statement that it was monitoring the charges.

The making of a magnate

Gautam Adani, 62, is worth $69.8 billion according to Forbes magazine. He is one of the few billionaires formally accused in the United States of criminal wrongdoing.

A self-described introvert, Adani keeps a low profile and rarely speaks to the media, often sending lieutenants to front corporate events.

Adani was born in Ahmedabad, Gujarat state, to a middle-class family but dropped out of school at 16 and moved to financial capital Mumbai to find work in the city's lucrative gem trade.

After a short stint in his brother's plastics business, he launched the flagship family conglomerate that bears his name in 1988 by branching out into the export trade.

His big break came seven years later with a contract to build and operate a commercial shipping port in Gujarat.

Adani Group's rapid expansion into capital-intensive businesses previously raised alarms, with Fitch subsidiary and market researcher CreditSights warning in 2022 it was "deeply over-leveraged."

In 2023 a bombshell report from US investment firm Hindenburg Research claimed the conglomerate had engaged in a "brazen stock manipulation and accounting fraud scheme over the course of decades."

Hindenburg said a pattern of "government leniency towards the group" stretching back decades had left investors, journalists, citizens and politicians unwilling to challenge its conduct "for fear of reprisal."

(With additional input from Reuters)