On Wednesday, the U.S. Securities and Exchange Commission (SEC) unveiled charges against Gautam Adani, Chairman of the Adani Group, and seven other individuals, accusing them of conspiring to commit securities fraud and wire fraud to secure investments from U.S. investors and global financial institutions.
The indictment claims that the accused orchestrated a plot to pay over $250 million in bribes to Indian government officials, enabling them to deceive investors and banks, raise billions of dollars, and obstruct justice.
The charges were announced by Breon Peace, U.S. Attorney for the Eastern District of New York; Lisa H. Miller, Deputy Assistant Attorney General for the Justice Department’s Criminal Division; and James E. Dennehy, Assistant Director in Charge of the FBI’s New York Field Office.
Peace stated, “As alleged, the defendants engineered an intricate scheme to bribe Indian officials to secure multi-billion-dollar contracts, with Gautam S. Adani, Sagar R. Adani, and Vineet S. Jaain misleading investors by hiding the bribery as they sought to raise funds from U.S. and international markets.”
Miller added, “These offences, allegedly committed by senior executives, were intended to procure and finance massive state energy contracts through corruption and fraud, ultimately at the expense of U.S. investors. The Criminal Division is committed to prosecuting corrupt and deceptive practices that violate U.S. law, no matter where in the world they occur.”
Gautam Adani, Sagar Adani, and Vineet Jaain have been charged with conspiracy to commit securities and wire fraud. The indictment also implicates Ranjit Gupta and Rupesh Agarwal, former executives of a renewable energy company listed on the New York Stock Exchange, as well as Cyril Cabanes, Saurabh Agarwal, and Deepak Malhotra, former employees of a Canadian investment firm, for conspiring to violate anti-bribery laws. This bribery scheme is alleged to have been connected to one of the world’s largest solar energy projects.
At the core of these allegations are U.S. laws like the Foreign Corrupt Practices Act (FCPA) and the Foreign Extortion Prevention Act (FEPA). The FCPA prohibits corrupt practices aimed at influencing foreign officials in exchange for business advantages.
The indictment levels five specific charges against the accused:
Count 1: Conspiracy to Violate the Foreign Corrupt Practices Act (FCPA)
Between 2020 and 2024, Ranjit Gupta, Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra, and Rupesh Agarwal are accused of conspiring to bribe Indian officials to obtain energy contracts. They allegedly used intermediaries and shell companies to facilitate the bribe payments in exchange for favourable decisions from Indian government agencies. The scheme sought to benefit the defendants’ businesses by influencing Indian officials to violate their duties and secure lucrative contracts for them.
Key overt acts in the indictment include:
- Electronic communications are discussing efforts to “motivate” state-level officials to purchase power under a linked energy project.
- Meetings with foreign officials to negotiate bribes.
- Concealing bribe transactions through coded language and misleading records.
Count 2: Securities Fraud Conspiracy
Gautam Adani, Sagar Adani, and Vineet Jain are accused of conspiring to defraud investors through bond issuances based on manipulated financial information. The indictment alleges that the defendants employed deceptive practices such as omitting material facts and falsifying corporate resolutions to attract U.S. investors to their bond offerings.
Key allegations include:
- Approval of misleading financial documents linked to a $750 million bond issuance.
- Misrepresentation of how the bond proceeds would be used in presentations to U.S. investors.
Count 3: Wire Fraud Conspiracy
The defendants are also accused of wire fraud conspiracy, in which they allegedly made false promises and fraudulent representations to secure loans and investments from lenders and investors. These actions were intended to mislead stakeholders and gain financial advantages for their energy businesses.
Count 4: Securities Fraud Related to 2021 Bond Offering
This count involves securities fraud concerning a 2021 bond offering. Gautam Adani, Sagar Adani, and Vineet Jain are accused of knowingly participating in a scheme to inflate the bonds’ attractiveness to investors by using deceptive tactics and failing to disclose critical financial information.
Count 5: Conspiracy to Obstruct Justice
Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra, and Rupesh Agarwal are charged with conspiring to obstruct justice by hindering ongoing U.S. investigations. The indictment claims that they destroyed evidence, withheld critical documents, and made false statements to mislead investigators about the bribery scheme.
The prosecutors detailed meetings and electronic communications in which the defendants coordinated their responses to investigators’ inquiries and attempted to cover up their actions.
Potential Consequences of Charges Stand
If convicted, the defendants face significant legal and financial repercussions, including the forfeiture of assets derived from the alleged criminal activities, such as proceeds from bribery, fraud, and obstruction. The case will now proceed to trial, where Gautam Adani and the other defendants will have the opportunity to defend themselves.
