Visiting the US in March 2023, Sagar Adani, nephew of Indian billionaire tycoon Gautam Adani, was suddenly approached by FBI agents who seized his electronic devices as part of a sweeping probe into an alleged years-long kickback scheme involving an Adani group’s renewables business.
Almost 20 months later, US authorities have unveiled bribery charges against Sagar, 30, and his uncle, a hugely influential business leader who is Asia’s second-richest man and widely seen as having close ties to Indian Prime Minister Narendra Modi.
The criminal and civil cases allege Adani family members and group leaders, along with former executives of Indian renewable company Azure Power and Canadian pension fund CDPQ, schemed to funnel $265mn in bribes to Indian officials to secure solar contracts. The scheme was allegedly concealed from US banks and investors from which Adani raised billions of dollars.
The charges present an unprecedented threat to the Adani Group, which had relaunched ambitious domestic and overseas expansion efforts following damaging separate allegations of corporate fraud levelled against it last year by short seller Hindenburg Research.
“This is more serious than the Hindenburg report,” said Bhaskar Chakravorti, dean of global business at The Fletcher School at Tufts University. “This will definitely make a dent in Adani’s fundraising from international investors.”
Adani Group called the allegations “baseless” and said it was seeking all “possible legal recourse”. CDPQ, which is an Adani shareholder, said it was co-operating with US authorities and had sacked the named employees last year. Azure said the former executives referenced in the charges had been “separated” from the company for more than a year and it was co-operating with the US agencies.
Adani’s nation-spanning conglomerate has built one of India’s largest renewable businesses as Modi’s government pushes ambitious plans to meet half its energy needs from green sources by 2030.
The indictments filed by the US attorney’s office in Brooklyn and the Securities and Exchange Commission (SEC) allege the renewables business Adani Green under its executive director Sagar Adani engaged in a “lucrative” bribery effort to win solar supply contracts with Indian government entities between 2020 and 2024.
These included a deal involving the state-owned Solar Energy Corporation of India (SECI) on the purchase of 7,000 megawatts of power-generating capacity in the southern state of Andhra Pradesh.
Gautam and Sagar Adani, along with Adani Green managing director Vneet Jaain, as well as former Azure executives, conspired to “corruptly offer” and authorise bribes to officials to gain energy contracts with state electricity companies from Andhra Pradesh to northern Kashmir, according to the criminal indictment.
The SEC alleged that the power purchase agreements were only executed by the state-owned solar company after the Adanis “undertook a massive bribery scheme to incentivise Indian state government officials to enter into contracts with SECI to buy energy at above market rates”.
Gautam Adani, 62, is alleged to have personally met a top government official in Andhra Pradesh three times in 2021 to “advance the execution” of a power supply agreement” between SECI and the state’s power distribution companies, according to the criminal indictment.
To keep track of their arrangements, Sagar Adani used his mobile phone to share specific details of bribes offered to government officials, it said. Jaain also photographed a document in April 2022 ahead of a meeting in New Delhi with a former Azure executive that summarised bribe amounts Adani would put forward, it said.
At the conglomerate’s headquarters in Ahmedabad, western India, the billionaire himself allegedly presented “multiple options” for ways to conceal the bribes, while power point presentations and excel sheets were drawn up to help the CDPQ executives analyse the best “corrupt payment option”.
According to the criminal charges, some of the defendants used code names, calling Gautam Adani “Mr A”, “the big man” and “Numero uno”. They also referred to Jaain as “snake” or “Numero uno minus one”.
Another key charge levelled against the two Adanis and Jaain is that they provided “false and misleading” information about their involvement in instigating bribes as they travelled to the US to seek dollar funding from investors and financial institutions.
Proceeds from a dollar-bond issue in 2021 were directly linked to capital expenditure requirements for various projects, including a “corrupt” project, according to the criminal indictment.
The SEC in its separate civil charge said Gautam and Sagar had for years “positioned Adani Green to investors and the public as a leader among its peers and within India in principles of good corporate governance, highlighting Adani Green’s purportedly rigorous anti-bribery and anti-corruption principles and policies”.
They “leveraged that narrative” to sell almost $1bn of Adani Green bonds and notes to US investors in September 2021, it said.
But when the former Azure and CDPQ executives were approached by US authorities, the defendants sought to withhold “key information” about the Indian graft efforts, according to the criminal charges. The charges said the executives made selective disclosures to investigators, revealing Adani’s requests for bribes “but concealing their own participation”.
The Azure and CDPQ executives allegedly deleted electronic messages and power point presentations, while in meetings during 2023 with the FBI and SEC they denied taking part in the Indian bribery efforts. “This strategy was designed to create the appearance that the co-conspirators were reporting misconduct rather than perpetrating misconduct.”
Soon after Sagar was approached by the FBI last year, Gautam Adani “emailed himself photographs of each page of the search warrant executed and grand jury subpoena served” on his nephew, according to the criminal indictment, which alleges the tycoon concealed that information from investors and banks.
Prosecutors noted that the Adani Group said the conglomerate was “unaware” of any investigation against its chair following media reports this year that US probes against the tycoon were under way.
The group’s head of corporate finance is also alleged to have sent more than a dozen emails in March 2024 to multiple investors and financial institutions stating the news was “baseless” and “malicious”.
Early on Thursday morning India time Adani Green suspended a $600mn bond issue planned for this week after news of the charges prompted a major sell-off across the conglomerate’s 10 listed stocks.
The drop in Adani Group shares was “similar to the reaction” following Hindenburg’s damaging allegations last year, said Abhay Agarwal, founder and managing director of Mumbai-based fund manager Piper Serica Advisors. “If this impacts the group’s ability to raise new capital to fund its projects it would be a huge negative.”
However, with Adani’s strong backing at home and extensive control over much of India’s critical infrastructure, Chakravorti at Tufts expects the billionaire “to ride it out much as he did when the Hindenburg report hit” even if it limits his travel outside India.
“Will he be extradited? I don’t think it is likely,” said Chakravorti. “At least not with the current administration in power.”
