The SEC has charged Gautam Adani and seven others with securities and wire fraud, alleging a scheme involving over $250 million in bribes to Indian officials for energy contracts. Key charges include conspiracy to violate the Foreign Corrupt Practices Act, securities fraud, wire fraud, and obstruction of justice. Convictions could lead to severe penalties and asset forfeitures.
United States: The United States Securities and Exchange Commission (SEC) has announced serious charges against Adani Group Chairman Gautam Adani and seven others for an alleged conspiracy to commit securities and wire fraud. The accusations involve a complex scheme to bribe Indian government officials and deceive U.S. investors and global financial institutions, raising billions of dollars through corruption and fraudulent practices.
Key Allegations Against the Accused
The indictment, revealed on Wednesday, claims that the accused orchestrated a scheme to pay over $250 million in bribes to Indian officials to secure energy contracts. United States Attorney for the Eastern District of New York Breon Peace remarked:
“As alleged, the defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars and Gautam S. Adani, Sagar R. Adani and Vineet S. Jaain lied about the bribery scheme as they sought to raise capital from U.S. and international investors.”
Lisa H. Miller, Deputy Assistant Attorney General for the Justice Department’s Criminal Division, emphasized the global implications of such corruption:
“These offenses were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of U.S. investors.”
Specific Charges Under U.S. Law
The charges invoke the Foreign Corrupt Practices Act (FCPA) and the Foreign Extortion Prevention Act (FEPA), which prohibit bribery of foreign officials for business advantages. The indictment outlines five key counts:
- Conspiracy to Violate the FCPA:
Between 2020 and 2024, the accused allegedly used intermediaries and shell companies to bribe Indian officials for lucrative energy contracts. Electronic messages and meetings reportedly reveal efforts to influence state officials and finalize corrupt payments. - Securities Fraud Conspiracy:
Gautam Adani, Sagar Adani, and Vineet Jaain are accused of manipulating financial documents and misrepresenting facts to issue bonds worth $750 million, attracting U.S. investors with deceptive practices. - Wire Fraud Conspiracy:
The defendants allegedly used false promises and fraudulent representations to secure loans and investments, misleading stakeholders to benefit their energy businesses. - Securities Fraud in 2021 Bond Offering:
This count focuses on a 2021 bond issuance, where deceptive tactics and omissions were allegedly employed to inflate the bond’s attractiveness to investors. - Conspiracy to Obstruct Justice:
Some accused, including Cyril Cabanes and Saurabh Agarwal, allegedly destroyed records and withheld evidence during U.S. government investigations, attempting to cover up the bribery scheme.
Potential Outcomes if Found Guilty
The indictment seeks forfeiture of assets linked to the criminal activities, including proceeds from bribery, fraud, and obstruction. If convicted, the defendants face significant penalties, including asset seizures and possible prison sentences.
What’s Next?
The case will now proceed to trial, where the accused will have the opportunity to defend themselves. U.S. prosecutors are determined to enforce compliance with international anti-corruption laws, as Assistant Director James E. Dennehy of the FBI stated:
“The Criminal Division will continue to aggressively prosecute corrupt, deceptive, and obstructive conduct that violates U.S. law, no matter where in the world it occurs.”
This landmark case underscores the global reach of U.S. anti-corruption laws and the growing scrutiny on corporate transparency in cross-border transactions.
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