The United States has expanded its investigation into India’s Adani Group, focusing on whether the conglomerate, along with its founder Gautam Adani, may have engaged in bribery. US prosecutors are examining whether Adani entities, or individuals associated with the company, were involved in paying officials in India for favourable treatment on an energy project. The investigation, led by the US Attorney’s Office for the Eastern District of New York and the Justice Department’s fraud unit in Washington, also encompasses Indian renewable energy company Azure Power Global.
Adani Group, in response to the allegations, stated, “We are not aware of any investigation against our chairman. As a business group that operates with the highest standards of governance, we are subject to, and fully compliant, with anti-corruption and anti-bribery laws in India and other countries.”
While Adani Group asserted its unawareness of any investigation against its chairman and reaffirmed its commitment to the highest standards of governance and compliance with anti-corruption laws, the Justice Department and Azure Power declined to comment on the matter.
It is noteworthy that neither Gautam Adani nor his company, nor Azure Power, have been formally charged with any wrongdoing by the US Justice Department. However, US law permits federal prosecutors to pursue foreign corruption allegations if they involve certain connections to American investors or markets.
Adani Hindenburg Row
This is not the first time that the US has interfered in India using Adani. The current probe follows allegations made last year (January 2023) by US short-seller Hindenburg Research, which accused the Adani conglomerate of improper governance practices, stock manipulation, and the use of tax havens. Despite the initial selloff of Adani Group’s stocks and bonds, the company has vehemently denied these allegations and successfully rebounded from the controversy.
In May of last year, a 6-member expert panel had failed to find any wrongdoing on SEBI’s part regarding Adani Group. The committee concluded that the Adani Group had disclosed the information of all the beneficial owners of the business. The report also listed all the details of these beneficial owners as obtained from SEBI.
The Adani Group had trashed the Hindenburg Research report as a ‘malicious combination of selective misinformation and stale, baseless and discredited allegations’. The court refused to order an SIT probe on the allegations made by short-seller Hindenburg. It added that there was no evidence that SEBI was negligent in taking action and no reason to suggest any conflict of interest on SEBI’s part.
In January 2024, the Supreme Court ruled that it could not interfere with the regulatory framework or use the Hindenburg report as a justification for launching an SIT investigation. SEBI will proceed with its investigation per the law, the court said.
Gautam Adani, the founder, has led the pushback against the claims, stating them as “malicious” and “false narratives.” Following the allegations, Adani Group’s shares have recovered substantially, with flagship Adani Enterprises Ltd. witnessing over a 70% gain in the past year. The Indian businessman’s fortune has surged again, positioning him as one of the world’s richest individuals. Despite the ongoing scrutiny, Adani Group’s continued presence in India’s economic landscape remains significant, with the company’s ventures attracting capital from around the world.
