The US Securities and Exchange Commission (SEC) has issued a summons to Adani Group's founder and chairman, Gautam Adani, and his nephew and Adani Green Energy's executive director, Sagar Adani, thereby kickstarting legal proceedings in the alleged ₹2,000 crore ($250 million) bribery case.
"Within 21 days after service of this summons on you (not counting the day you received it)… you must serve on the plaintiff an answer to the attached complaint or a motion under Rule 12 of the Federal Rules of Civil Procedure," said a 21 November SEC notice to Gautam Adani and Sagar Adani.
"If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer or motion with the court," said the US regulator, which has filed a case in this connection in a New York court.
The Adani Group has yet to respond to Mint's questionnaire.
On Wednesday, federal prosecutors in New York indicted a total of eight individuals for allegedly paying more than $250 million in bribes to Indian government officials between 2020 and 2024 to obtain lucrative solar-energy contracts.
The Indian conglomerate has denied the allegations by the US Department of Justice (DoJ) and the SEC, describing the allegations against its directors as "baseless".
"All possible legal recourse will be sought," said a spokesperson for the Adani Group on Thursday. "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."
"We became aware of the ‘specificity’ of this two days ago," Adani Group chief financial officer Jugeshinder Singh wrote on X on Saturday morning, referring to the ongoing case filed by US authorities against three Adani Green Energy Ltd directors.
"We were aware that something is afoot (and in February 2024 144a offering circular in Risk Factors we disclosed as such. This was the first public issuance of any of our portfolio companies or their subsidiaries or JV companies after our annual results of 31 March 2023)," wrote Singh.
Singh said none of the eleven public companies of the conglomerate are subject to legal proceedings. "None of the issuers ( i.e., companies in our portfolio or specific issuers that are subsidiaries of the public companies) are accused of any wrongdoing in the said legal filing," wrote Singh.
According to the indictment, Adani Green Energy Ltd raised $2 billion from American and foreign investors based on false and misleading statements about the firm's anti-corruption and anti-bribery efforts. For this reason, the DoJ opened a criminal investigation, while the SEC is pursuing a civil investigation against Gautam Adani, Sagar Adani, and Adani Green Energy's chief executive Vneet Jaain.
The DoJ still has to summon the three executive directors of Adani Green Energy.
The SEC's case is if Adani broke the US Securities Act when Adani Green raised money from American investors as it did not disclose a justice department probe into allegations of bribes paid by the company's directors to unnamed Indian officials between 2020 and 2024.
"In 2021, two senior executives of Adani Green Energy—Gautam Adani, Adani Green’s founder and controlling shareholder, and Sagar Adani, Adani Green’s executive director (collectively, “defendants”)—engaged in a bribery scheme involving the equivalent of hundreds of millions of dollars to obtain contracts that benefitted Adani Green, while, at the same time, falsely touting the company’s compliance with anti-bribery principles and laws in connection with a $750 million bond offering (the “offering”)," the SEC said in its complaint filed in a court in New York on 20 November.
"In September 2021, defendants leveraged that narrative in the offering to sell $750 million of Adani Green corporate bonds (“notes”), including more than $175 million in notes to investors in the US. In connection with the offering, Adani Green told purchasers of the notes that none of Adani Green’s directors or officers, including defendants themselves, had paid or promised to pay bribes to government officials or attempted to unduly influence those officials," said the SEC.
"Adani Green and the defendants also emphasized to underwriters and potential investors that Adani Green had implemented robust anti-bribery and anti-corruption processes and that Adani Green was a leader in India in good corporate governance. None of this was true," said the SEC.
