Gautam Adani not facing bribery charges in US, says his firm

New Delhi: Billionaire Gautam Adani and his associates have not been charged under the US Foreign Corrupt Practices Act (FCPA), according to an Adani Group statement released on Wednesday. The statement clarified that while Adani and his team face three charges, including securities fraud and wire fraud—which carry monetary penalties—none of them are related to FCPA violations.

The indictment filed last week by the US Department of Justice (DOJ) in a New York court does not accuse Gautam Adani, his nephew Sagar Adani, or Vneet Jaain of conspiring to violate the FCPA, said Adani Green Energy Ltd (AGEL) in a stock exchange filing. The charges against AGEL executives involve allegations of securities fraud conspiracy, wire fraud conspiracy, and securities fraud. The company also noted that these charges typically carry lighter penalties compared to bribery-related offenses.

AGEL is at the center of allegations involving $265 million in bribes allegedly paid to Indian officials to secure solar power contracts, which could have resulted in $2 billion in profits for the company over 20 years. Despite these allegations, the charges do not include claims of bribery.

In addition, Gautam and Sagar Adani face a civil complaint related to violations of the Securities Act, including aiding AGEL in its alleged violations. Last week, Adani Group denied all accusations as baseless and indicated it would take legal action to defend itself.

The FCPA prohibits entities with US links—such as those with US investors, a public listing, or joint ventures—from offering bribes to foreign officials in exchange for favorable treatment. While no Adani firms trade in the US, some, including AGEL, have American investors.

Adani Group emphasized that neither Gautam Adani, Sagar Adani, nor Vneet Jaain have been charged with violating the FCPA. The charges they face relate to securities and wire fraud. Legal experts supporting the group, including former attorney general Mukul Rohatgi, noted that the charges do not include allegations of conspiracy to violate the FCPA or obstruct justice.

In its filing, AGEL also explained that the civil complaint alleges violations of the Securities Act of 1933 and 1934, with claims that the executives aided and abetted AGEL’s violations. The complaint calls for civil monetary penalties, though it does not specify amounts.

The DOJ indictment accuses senior executives from Adani Green, Azure Power, and CDPQ (a major shareholder of Azure) of being involved in a scheme to bribe Indian officials to secure lucrative solar energy contracts. The indictment also alleges that executives from these companies misrepresented their anti-bribery practices to US investors and concealed bribery payments that were used to secure financing for green energy projects.

The indictment includes charges against several executives, but does not name anyone involved in paying bribes. It also alleges attempts by executives to obstruct US investigations into the scheme.

Since the indictment, Adani Group companies have seen a significant drop in market capitalization—about $54 billion. Credit rating agencies such as Moody's and Fitch have downgraded the outlook for several Adani firms, citing concerns over increased capital costs and reduced access to funding due to the legal challenges.

In response to the legal issues, AGEL also canceled a $600 million debt raise through green bonds, despite strong investor demand. Meanwhile, French oil company TotalEnergies, a major investor in AGEL and Adani Total Gas, has halted new investments in Adani companies.

The US International Development Finance Corporation (DFC) is reviewing its $550 million loan to an Adani-led consortium developing a container terminal in Colombo Port. The DFC is evaluating the potential impact of the indictments on the project's integrity and compliance.

Investment firm GQG Partners, which invested in Adani Group following the fraud allegations by Hindenburg Research, has also seen a drop in the value of its holdings. US investment bank Jefferies, a key supporter of the Adani Group, is reassessing its relationship with the conglomerate due to concerns over reputational risks and compliance issues.