Reuters reports that the U.S. Securities and Exchange Commission (SEC) has issued a summons to Gautam Adani, the head of the Adani Group, and his nephew Sagar Adani, following allegations of a massive bribery scheme, according to a court filing in the Eastern District of New York. This action comes as part of a broader federal indictment that accuses the duo of orchestrating bribes totaling $265 million to secure lucrative power-supply contracts in India, aiming to profit over $2 billion from solar energy deals over two decades.
The SEC’s lawsuit claims that the Adanis misled investors by promoting the company’s adherence to anti-bribery laws during a $750 million bond offering, which was part of the scheme. The summons demands a response within 21 days, with the SEC seeking unspecified monetary penalties and restrictions on the Adanis’ ability to serve as corporate officers. This legal action marks another chapter in the ongoing scrutiny of the Adani Group, one of India’s largest conglomerates, previously rocked by financial controversies.
While the Adani Group has refuted these criminal accusations, labeling them as “baseless,” their Chief Financial Officer emphasized that the allegations are confined to just 10% of Adani Green Energy’s business, distancing other entities within the conglomerate from the charges. Despite this, the fallout from these allegations has been immediate and severe, with the market value of Adani Group companies plummeting, leading to a loss of billions in shareholder value. This financial turbulence was further compounded by Kenya’s decision to cancel a significant airport development project with the group, highlighting the international ramifications of the scandal.
The U.S. Department of Justice has escalated the matter by issuing arrest warrants for Gautam and Sagar Adani, underscoring the gravity of the accusations which involve not only corruption but also the manipulation of investor confidence. This situation represents the second major crisis for the Adani Group in recent years, following accusations by Hindenburg Research of stock manipulation and accounting fraud, which had previously shaken investor trust and market stability.
This series of events paints a complex picture of legal, financial, and ethical challenges for Gautam Adani, whose business empire spans from ports to energy, and now faces critical tests both in court and in the public eye. The implications extend beyond individual repercussions, potentially influencing the broader landscape of corporate governance and international business dealings in emerging markets.
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