US SEC Summons Adani and Nephew Over Alleged Bribery in Solar Deals

The U.S. Securities and Exchange Commission (SEC) has summoned Gautam Adani, one of India’s richest businessmen, and his nephew Sagar Adani over allegations of bribery. The SEC claims that the Adani Group, a major conglomerate, engaged in hundreds of millions of dollars in bribes while presenting itself as compliant with anti-bribery laws during a $750 million bond offering.

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The SEC’s summons, issued in the U.S. District Court for the Eastern District of New York, requires the Adanis to respond within 21 days. The lawsuit seeks financial penalties and asks to bar both Gautam and Sagar Adani from serving as officers in publicly traded companies.

The allegations add to the challenges facing the Adani Group, known for its wide-ranging interests in infrastructure, energy, and ports, as the fallout has already led to significant financial and reputational damage.

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Allegations of Bribery

The charges revolve around accusations that Gautam and Sagar Adani participated in a $265 million bribery scheme. According to federal prosecutors, the scheme involved paying bribes to Indian government officials to secure power-supply contracts for Adani Green Energy, a renewable energy subsidiary of the Adani Group.

These contracts, prosecutors claim, were designed to generate $2 billion in profits over the next 20 years and included plans to build India’s largest solar power project. Federal arrest warrants have also been issued for both Adanis and seven other defendants involved in the case.

The Adani Group Responds

The Adani Group has denied all allegations, describing the charges as “baseless.” The group’s Chief Financial Officer clarified that the accusations relate only to one contract managed by Adani Green Energy, which represents about 10% of the company’s operations. The CFO emphasized that no other subsidiaries of the conglomerate were implicated in the case.

Representatives for the Adani Group have not yet commented on the SEC summons, but the company has maintained that it complies with all legal and regulatory standards.

Financial and Global Fallout

The impact of these allegations on the Adani Group has been immediate and far-reaching. Billions of dollars were wiped off the market value of the group’s companies, signaling a loss of investor confidence. In a separate blow, the Kenyan government canceled a major airport development project with the Adani Group, further complicating its global operations.

This crisis marks the second major controversy for the conglomerate in just two years, raising questions about the group’s governance and transparency practices.

The SEC’s Demands

In addition to seeking financial penalties, the SEC is pushing for restrictions that could prevent Gautam and Sagar Adani from holding leadership roles in publicly listed companies. If approved, such restrictions could significantly affect the group’s ability to secure international investments and maintain its leadership structure.

What’s at Stake for the Adani Group

These allegations come at a critical time for the Adani Group, which has built its empire on bold projects in energy and infrastructure. The company has positioned itself as a leader in India’s renewable energy sector, but this legal battle threatens to overshadow its accomplishments.

For investors and global partners, the accusations raise serious concerns about how the group conducts business. Losing trust could mean losing opportunities, and the fallout is already visible. Billions of dollars in market value have vanished, and the cancellation of the massive Kenyan airport project only adds to the pressure.

If the SEC’s demands succeed in removing key figures like Gautam and Sagar Adani from leadership roles, the group could face significant challenges in steering its future. With so much at stake, the next steps will be crucial for the company to regain its footing and restore confidence.

Also Read: Adani Group Makes a Strong Comeback, Secures $1.95 Billion in Bond Sale