Gautam Adani's net worth plunged by over $10.5 billion, or nearly ₹88,726 crore, on Thursday, November 21, 2024, after he was allegedly indicted in New York, US, over his role in a multibillion-dollar bribery and fraud scheme. According to US authorities, Gautam Adani, chairman of the ports-to-power conglomerate and seven other defendants, agreed to pay Indian officials over $250 million in bribes to obtain solar contracts.
According to the Forbes Real-Time Billionaire Index, Adani, India's second-richest man, now commands a net worth of $59.3 billion. During today's session, the bribery scandal triggered a rout in the Adani Group stocks. Several Adani Group shares, including those of the flagship firm Adani Enterprises, suffered massive losses and hit their lower circuits in early trade.
The top loser among the group stocks was Adani Enterprises, which closed at ₹2,182.55, down 22.61 per cent. The sharp selloff in the group stock wiped out over ₹2 lakh crore from the Adani Group's overall market capitalisation (m-cap). The group's total m-cap declined to nearly ₹12.1 lakh crore, down from ₹14.31 lakh crore in the previous session.
According to US authorities, more than $250 million or ₹2,100 crore in bribes were promised to Indian Government officials to secure solar energy contracts. related to a renewable energy project in India. Adani and his nephew Sagar are accused of orchestrating the scheme to ensure a solar energy project and misleading investors during a $750 million bond offering, which raised about $175 million from US investors.
"A five-count criminal indictment was unsealed today in federal court in Brooklyn charging Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, executives of an Indian renewable-energy company, with conspiracies to commit securities and wire fraud and substantive securities fraud for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions based on false and misleading statements," said a statement from US Attorney's Office, Eastern District of New York.
"The indictment also charges Ranjit Gupta and Rupesh Agarwal, former executives of a renewable-energy company with securities that had traded on the New York Stock Exchange, and Cyril Cabanes, Saurabh Agarwal and Deepak Malhotra, former employees of a Canadian institutional investor, with conspiracy to violate the Foreign Corrupt Practices Act in connection with a bribery scheme also perpetrated by Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, involving one of the world’s largest solar energy projects," it added.
Adani Group denied the allegations and said it will seek all possible legal recourse. "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," it said. "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," it added.
"Gautam and Sagar Adani were engaged in the bribery scheme during a September 2021 offering by Adani Green that raised $750 million, including approximately $175 million from US investors. The Adani Green offering materials included statements about its anti-corruption and anti-bribery efforts that were materially false or misleading," said the US Securities and Exchange Commission.
In the indictment unsealed by federal prosecutors in New York, Adani, 62, was charged with securities fraud, conspiracy to commit securities fraud, and wire fraud. One result of the US legal action is that the Adani group decided not to proceed with a proposed US dollar-denominated bond offering. The US Department of Justice said, “The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.”
The unsealed indictment shows that in 2020, executives of Adani Green and Azure "knowingly and wilfully conspired" and agreed to "corruptly" offer, authorise, and pay bribes to government officials in India to "obtain or retain business advantages." The prosecutors alleged that Adani made misleading statements to the public, the Indian stock exchange, and investors despite being made aware of the US investigation in 2023.
Adani and his executives have also been accused of making false and misleading statements to investors and lenders in the US regarding the company's anti-bribery commitments and practices while raising money from them. Between 2021 and 2024, Adani raised more than $3 billion in loans and bonds, including from investors in the US.
According to lawyers, the matter could be settled between the Indian tycoon and US authorities, and the billionaire could also seek a dismissal of the indictment. In its order, the grand jury said if any of the executives were found guilty of the charges, they would have to forfeit any property or proceeds derived directly or indirectly from the offences.
The latest scandal comes after US-based short seller Hindenburg Research accused Adani companies of stock price manipulation and fraud in 2023, just as the group began a share offering meant to raise $2.5 billion. Last year, the Adani companies lost $68 billion in market value after Hindenburg Research accused Adani of “pulling the largest con in corporate history,” triggering a massive sell-off of the group's stocks.
The Adani group dismissed Hindenburg’s allegations, saying none were “based on independent or journalistic fact-finding.” Adani’s response included documents and data tables. It said the group had made all necessary regulatory disclosures and abided by local laws. Adani’s net worth shot up about 2,000 per cent recently as share prices for his listed companies soared.
