The Adani Group is being accused of potentially manipulating stock prices and engaging in accounting irregularities.
US prosecutors have broadened their inquiry into India’s Adani Group, now looking into potential bribery accusations and the behavior of the company’s founder, as per sources familiar with the situation, as reported by Bloomberg.
The investigation aims to determine if an Adani-related entity or individuals connected to the company, including Gautam Adani, made payments to Indian officials in exchange for preferential treatment on an energy project. This probe also encompasses Indian renewable energy firm Azure Power Global. The US Attorney’s Office for the Eastern District of New York and the Department of Justice’s fraud unit in Washington are handling the ongoing investigation.
Adani Group has announced that they are unaware of any ongoing investigations against their chairman. They emphasize their commitment to full compliance with anti-corruption laws both in India and internationally. The Department of Justice and Azure Power have not commented, and no charges have been filed against Gautam Adani, Adani Group, or Azure. It is crucial to remember that not all investigations lead to legal actions.
As a significant player in India’s infrastructure sector, Adani Group attracts global investments, which could potentially involve the United States’ laws against foreign corruption that affect American investors or markets.
In the past year, the conglomerate faced accusations of stock manipulation and accounting fraud by short-seller Hindenburg Research. However, the company strongly denied these claims. Despite an initial decline in share value, they have since recovered.
Upon receiving these accusations, both the Department of Justice and the Securities and Exchange Commission have initiated investigations into the matter. These inquiries have made considerable progress, and the DOJ holds the power to proceed without prior notice to the concerned parties.
Adani Group and Azure Power are rival entities in India’s eco-friendly energy sector, having obtained contracts for projects under a state-run solar program. Adani Group aspires to become a prominent global renewable energy corporation, especially considering Prime Minister Narendra Modi, who is often perceived as a close associate of Gautam Adani, actively promotes extensive green initiatives.
The Foreign Corrupt Practices Act (FCPA) prohibits entities linked to the United States, including publicly listed companies, American investors, or joint ventures, from offering bribes to foreign government officials in exchange for preferential treatment. Prosecutors in Brooklyn have a reputation for vigorously handling such cases, even when the accused companies do not trade in the US but have US investors.
FCPA investigations can be time-consuming and intricate due to the need to collect evidence and interview witnesses located overseas. Nevertheless, these cases often garner substantial attention and may result in significant penalties for companies, while also providing victories for prosecutors.
Though FCPA cases have been more frequently directed towards executives, it is uncommon for the top leader of a large corporation to face legal issues. At 61 years old, Gautam Adani has strongly refuted past claims of misconduct. In a recent address to shareholders in July, he denounced the Hindenburg Research accusations as “malicious” and built upon “false narratives.”
