The Adani Group’s fortunes took a sharp turn on November 20 when the United States Department of Justice unsealed an indictment against Gautam Adani, his nephew Sagar Adani, and Vneet Jaain, MD & CEO of Adani Green.
The indictment, filed in Brooklyn, New York, also named executives from US-based Azure Power and Canadian investor CDPQ, allegedly charging them with a range of serious offenses.
The alleged charges include conspiracy to violate the US Foreign Corrupt Practices Act (FCPA), securities fraud conspiracy, wire fraud conspiracy, securities fraud concerning a 2021 bond issue, and conspiracy to obstruct justice.
Following the indictment, Adani Group stocks plummeted, sparking widespread political and public outcry. Opposition parties in India, particularly the Indian National Congress, called for a parliamentary discussion on the matter, and the Kenyan government cancelled two major infrastructure projects awarded to the Adani Group.
Jugeshinder Robbie Singh, the Group CFO of Adani Group, posted on X regarding legal matters related to Adani Green. He clarified that the issue pertains to a specific contract, which represents around 10% of Adani Green’s business. He mentioned that the company had been aware of potential issues and had disclosed risks in their February 2024 offering circular.
Singh stated that none of Adani Group’s portfolio companies are part of the recent US Department of Justice (DOJ) legal filings, and no accusations of wrongdoing have been made against them. He urged the public to refrain from drawing conclusions from unrelated reports, emphasising that the allegations are still under review and no court has yet ruled.
In a later official statement, Adani Green Energy Ltd (AGEL) strongly defended its executives. “The worst of the charges, the conspiracy to violate the FCPA, does not apply to Gautam Adani, Sagar Adani, or Vneet Jaain,” the company stated.
“Neither are they facing charges of conspiracy to obstruct justice.”
The clarification provided much-needed relief for investors, and within days, Adani Group stocks surged, hitting upper circuit limits for two consecutive days.
Senior Supreme Court advocate Jai Anant Dehadrai weighed in on the legal issues surrounding the alleged charges, stating on X that the allegations were “fundamentally flawed.”
Dehadrai, an expert in American law, criticised the wire fraud charge, arguing that “the US Court of Appeals for the Eleventh Circuit has set clear precedents in understanding the limits of wire fraud. If the alleged victims received what they paid for, even in the presence of deceit, a conviction cannot stand.” He further stated that the charges were “so ridiculous and remote” that “no jury in America will ever return a guilty verdict.”
Dehadrai elaborated on the difficulties prosecutors would face in proving wire fraud, explaining that for such a charge to stick, there must be a direct link between fraudulent actions and tangible harm.
In this case, he pointed out, the US investors in Adani Green’s $2 billion bond had not lost any money. “Can I predict that some employee may bribe a local SHO somewhere in my company?” Dehadrai asked rhetorically. “Should I disclose to my investors in the US that such an incident may happen even before the incident occurs? That is what the Department of Justice wants the Adanis to do. It’s ludicrous.”
Further complicating the charges, Dehadrai noted, was the lack of evidence to substantiate the bribery claims. For instance, the indictment suggested that an alleged bribery scheme was linked to Andhra Pradesh’s power regulator. However, as Dehadrai explained, “why bribe an official to buy the cheapest power, which came with battery installations to store it too? Logic takes a backseat in this case.”
As the indictment unfolded, reactions from political figures and legal experts highlighted the complexity of the alleged charges.
Mahesh Jethmalani, a senior Supreme Court advocate, described the indictment as part of a “smear campaign” aimed at discrediting the Adani Group. He argued that the case was politically motivated, pointing to the timing of the charges. “This indictment has all the hallmarks of agenda-driven persecution,” Jethmalani observed in an interview.
“It’s based on claims, not proven facts. The DOJ is acting in unseemly haste.”
Despite the allegations, some investors have shown their unwavering support for the Adani Group. GQG Partners, for example, has continued to back the company, and institutional investors have begun to reiterate their confidence in its operations. However, the opposition in India remains steadfast in calling for a parliamentary discussion, urging the government to hold the group accountable.
In the aftermath of the indictment, the Indian government has distanced itself from the issue. “This is a legal matter involving private individuals and the US Department of Justice,” said Ministry of External Affairs (MEA) spokesperson Randhir Jaiswal.
“We have not received any request for summons or arrest warrants from the US.”
As the legal process continues to unfold, the Adani Group remains in the spotlight, with many observers questioning the motives behind the charges and the potential impact on its global operations. Indian-American attorney Ravi Batra told PTI that the bribery case against Adani may potentially be withdrawn if the charges are deemed defective after Donald Trump takes office as the 47th U.S. President in January 2025.
Batra explained that Trump’s administration could intervene in the case by using prosecutorial discretion, potentially ending the charges if they are deemed unworthy or lacking merit. He further suggested that Adani’s legal team could ask the Indian government to raise the matter bilaterally with the incoming Trump administration.
Legal experts point that the alleged charges against Adani raise serious concerns about the extraterritorial application of U.S. law, as the individuals involved are based in India. The case is set against a backdrop of significant transitions in U.S. federal leadership, as President Joe Biden’s appointees, including SEC Chair Gary Gensler and U.S. Attorneys in New York, are expected to step down before Trump takes office, potentially influencing the handling of such cases.
So, at the heart of the alleged case is the question: is the indictment a genuine legal issue or a politically charged attempt to tarnish the reputation of one of India’s most prominent business groups? As Dehadrai concluded,
“The charges are legally unsustainable and are likely to be dismissed by a jury.”
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