Image used for representative purpose only.
| Photo Credit: Reuters

International Holding Co’s (IHC) outlook on investments in India’s Adani Group remains unchanged, the Abu Dhabi conglomerate said following the U.S. indictment of billionaire Gautam Adani.

“Our partnership with the Adani Group reflects our confidence in their contributions to the green energy and sustainability sectors,” IHC said in a statement on Wednesday (November 27, 2024).

“As with all our investments, our team continues to evaluate relevant information and developments. At this time, our outlook on these investments remains unchanged.”

Last week, U.S. authorities accused Mr. Adani, his nephew and executive director Sagar Adani and the managing director of Adani Green, Vneet S. Jaain, of being part of a scheme to pay bribes of $265 million to secure Indian power supply contracts.

The ports-to-power conglomerate denied the charges as “baseless” and vowed to seek “all possible legal recourse”.

In October last year, IHC boosted its stake in Adani Enterprises to more than 5% after it sold down its investments in two other Adani companies. At the time, IHC said Adani Enterprises, the group’s flagship company, was “uniquely poised to capitalise on India’s robust growth journey”.

The increased investment came after short seller Hindenburg Research accused the conglomerate in January last year of stock manipulation and significantly high debt levels. Adani Group denied those allegations.

Adani and an IHC subsidiary last year formed a technology joint venture to create a platform to use AI and enterprise blockchain products to work on the digitisation of the Indian economy.

Adani Green, the company at the centre of the indictment, said on Wednesday Gautam Adani had been charged in the United States for alleged violations of securities law and faced potential fines but had not been charged under the U.S. Foreign Corrupt Practices Act.

In a stock exchange filing, Adani Green said a complaint by U.S. regulator the Securities and Exchange Commission (SEC) sought “an order directing the defendants to pay civil monetary penalties (but) it does not quantify the amount of penalty”.

The civil action launched by the SEC runs in parallel to U.S. federal prosecutors’ indictment against Mr. Adani and others.

In May, Tanzania entered into a 30-year concession agreement with Adani Ports, a unit of Adani Group, to operate a container terminal in its Dar es Salaam port, known as Container Terminal 2. File
| Photo Credit: Reuters

“Tanzania plans to honour its contracts with an Adani Group unit despite a U.S. indictment of its billionaire chairman Gautam Adani on accusations of bribery and fraud,” a senior official at the ports authority said.

Mr. Adani was indicted for fraud last week, and arrest warrants were issued for him and his nephew for their alleged roles in a $265 million scheme to bribe the officials to secure power-supply deals. Adani Group has denied the accusations.

In May, Tanzania entered into a 30-year concession agreement with Adani Ports, a unit of Adani Group, to operate a container terminal in its Dar es Salaam port, known as Container Terminal 2.

Adani Ports also struck a share purchase agreement for a 95% stake in state-owned Tanzania International Container Terminal Services for $95 million.

“We don’t have any problems with anyone. Everything we are doing is according to our laws and agreements,” Tanzania Ports Authority Director General Plasduce Mbossa told Reuters late on Tuesday (November 26, 2024) when asked about the contracts’ status.

“For contracts we have, we don’t have such claims (of wrongdoing). If there are other people who are taking actions, then they are doing so according to their reasons,” Plasduce Mbossa added.

Last week in neighbouring Kenya, President William Ruto scrapped a deal signed with a unit of Adani to build power transmission lines.

He also cancelled a proposal to add a second runway at the Jomo Kenyatta international airport and upgrade the passenger terminal in exchange for a 30-year lease.

Gautam Adani, founder chairman of the ports-to-energy conglomerate, Sagar Adani and another key executive, Vneet Jaain, have been charged by the U.S. Department of Justice with being part of an alleged scheme to pay $265 million in bribes to Indian officials. File.
| Photo Credit: PTI

Billionaire Gautam Adani and his nephew Sagar Adani have not been charged with any violations of the U.S. Foreign Corrupt Practices Act (FCPA) in the indictment filed by U.S. authorities in a court in a bribery case, the Adani Group said on Wednesday (November 27, 2024).

Gautam Adani, founder chairman of the ports-to-energy conglomerate, Sagar Adani and another key executive, Vneet Jaain, have been charged by the U.S. Department of Justice with being part of an alleged scheme to pay $265 million in bribes to Indian officials to win contracts for supply of solar electricity that would yield $2 billion profit over a 20-year period.

Editorial | ​Shielding Adani: On the U.S. indictment, the Indian government’s stand

In a stock exchange filing, Adani Green Energy Ltd, which is at the centre of the bribery allegations, said reports claiming that the three have been charged with FCPA violations “are incorrect”.

They have been charged with offences that are punishable with a monetary fine or penalty.

“Gautam Adani, Sagar Adani and Vneet Jaain have not been charged with any violation of the FCPA in the counts set forth in the indictment of the US DOJ or civil complaint of the US SEC.”

“These directors have been charged on three counts in the criminal indictment, namely (i) alleged securities fraud conspiracy, (ii) alleged wire fraud conspiracy, and (iii) alleged securities fraud,” the filing said.

The Adani Group has denied all allegations and said it will take all possible legal recourse to defend itself.

A criminal indictment has been filed before the United States District Court Eastern District of New York by the Department of Justice in the case of USA against Gautam Adani, Sagar Adani and Vneet Jaain.

“The indictment does not specify any quantum of any fine/penalty,” the company said.

The civil complaint alleges that the executives violated certain sections of the Securities Act of 1933 and the Securities Act of 1934, and aided and abetted Adani Green Energy Limited’s violation of the Acts, it said.

“Although the complaint prays for an order directing the defendants to pay civil monetary penalties, it does not quantify the amount of penalty,” it said.

Representational image of the Adani Group logo
| Photo Credit: Reuters

Ratings agency Fitch has put some of Adani Group’s bonds on watch for a possible downgrade after some of the firm’s key executives were indicted by U.S. authorities on bribery charges.

Adani Energy Solutions Ltd, Adani Electricity Mumbai and some of Adani Ports and Special Economic Zone rupee and dollar bonds are now on “watch negative”, Fitch said.

Ratings on four Adani subsidiary senior unsecured dollar bonds were downgraded from stable to negative, the agency said.

Fitch said it would monitor the U.S. investigation for any impact on Adani’s financial position, “particularly any material deterioration in near- to medium-term funding access, including their ability to roll over existing credit lines or access new facilities, as well as potentially higher credit spreads”.

TotalEnergies to halt financial contribution

French oil major TotalEnergies said on Monday (November 25, 2024) it would halt financial contributions to its Adani Group investments following last week’s indictment.

U.S. prosecutors have charged billionaire Gautam Adani, founder of the Adani Group, and seven others for their alleged roles in a $265 million scheme to bribe Indian officials to secure power-supply deals.

The Adani Group has said the accusations as well as those levelled by the U.S. Securities and Exchange Commission in a parallel civil case were “baseless and denied” and that it would “seek all possible legal recourse”.

Adani dollar bonds steadied on Tuesday and prices rose slightly after three days of heavy falls.

Prices on some of the more liquid Adani Ports and Special Economic Zone debts maturing between 2027 and 2041 were up between half a cent and 1.5 cents on the dollar. They have fallen about 8-12 cents since news of the indictment.

Adani Group CFO Jugeshinder Singh.
| Photo Credit: Reuters

None of Adani group portfolio companies, comprising 11 listed firms, have been accused of any wrongdoing, conglomerate’s CFO Jugeshinder Robbie Singh said on founder and chairman Gautam Adani’s indictment on bribery charges in the US.

In a post on X (formerly Twitter), Mr. Singh said the group would make a detailed comment on the US indictment once it gets counsel approvals.

Mr. Adani and seven other defendants, including his nephew Sagar Adani, allegedly agreed to pay about $265 million in bribes to Indian government officials between approximately 2020 and 2024 to obtain lucrative solar energy supply contracts on terms that were expected to yield $2 billion of profit over 20 years, according to an indictment unsealed in a New York court on Wednesday.

The Securities and Exchange Commission of the US has also charged Mr. Adani and Mr. Sagar Adani, executives of Adani Green Energy Ltd and Cyril Cabanes, an executive of Azure Power Global, for “conduct arising out of a massive bribery scheme”.

“There is a lot of news and reports that will try to pick unrelated items and create a headline. My humble request is that we will respond in the fullness of time once we review in detail the matter as presented in the legal filing,” Mr. Singh said.

He hastened to add that no court has ruled on the indictment, and as outlined by lawyers of the US Department of Justice, these are “allegations and the accused have a presumption of innocence”.

The CFO, who was the first line of defence when US short-seller Hindenburg Research had accused the ports-to-power conglomerate of fraud in January 2023, said the group became aware of the “specificity” of the US indictment against founder and chairman Mr. Adani two days ago.

“We were aware that something is afoot (and in February 2024 144a offering circular in Risk Factors we disclosed as such. This was the first public issuance of any of our portfolio companies or their subsidiaries or joint venture companies after our annual results of 31st March 2023),” he said.

He, however, did not state what the company had disclosed in February 2024.

Adani Group, he said, has a portfolio of 11 public companies and “none are subject to indictment (i.e. defendants in any legal proceedings in the recent DOJ lawyer filings to a court in NYC)”.

“None of the issuers (i.e. companies in our portfolio or specific issuers that are subsidiaries of the public companies) are accused of any wrongdoing in the said legal filing,” he said.

The indictment “relates to one contract of Adani Green, which is roughly 10 per cent of overall business of Adani Green (there is a lot more precise and comprehensive detail of this which we will elaborate in an appropriate forum),” he said.

The statement comes two days after Mr. Adani was charged by US prosecutors over his role in an alleged years-long scheme to pay $265 million (about ₹2,200 crore) bribes to Indian officials to secure solar energy contracts. The conglomerate has denied the allegations, calling them baseless, and announced plans to seek legal recourse.

The Adani Family has 11 listed entities on the Indian stock exchanges – flagship incubator Adani Enterprises Ltd, electricity producer Adani Power Ltd, ports company Adani Ports & SEZ, power transmission firm Adani Energy Solutions Limited, renewable arm Adani Green Energy Ltd (AGEL), city gas distributor Adani Total Gas Ltd, commodities firm Adani Wilmar Ltd, media firm New Delhi Television Ltd and cement companies Ambuja Cements Limited, ACC Ltd, and Sanghi Industries Ltd.

“There is a lot of news and reports that will try to pick unrelated items and create a headline. My humble request is that we will respond in the fullness of time once we review in detail the matter as presented in the legal filing (Please note that no court has ruled on this and as outlined by lawyers of DOJ these are ‘allegations and accused have a presumption of innocence’). We will make a more detailed comment once we get counsel approvals to discuss what we can in public on a matter that is sub-judice,” he added.

Indian billionaire Gautam Adani.
| Photo Credit: Reuters

A U.S. court indicted billionaire Gautam Adani and seven others including his nephew Sagar and three other executives on charges of fraud and bribery. The case pertained to a deal between Adani Green Energy and a U.S. seller for 12 gigawatts of solar power to be sold to various States. The charges came on a day when the firm planned a green bond launch in the US. The Adani subsidiary eventually cancelled the sale.

The U.S. Securities and Exchange Commission (SEC) has charged Mr. Adani, founder and chairman of the Adani Group, with allegedly defrauding American investors and bribing officials. The SEC alleged that the bribery scheme was orchestrated to enable renewable energy companies Adani Green and Azure Power to capitalise on a multi-billion-dollar solar energy project awarded by the Indian government. The complaint charges them with violating the antifraud provisions of the federal securities laws and seeks permanent injunctions, civil penalties, and officer and director bars.

Adani’s stocks nosedived as reports of a possible arrest of one of India’s richest businessmen loomed large. The Congress, which has repeatedly sought a JPC probe into the “Adani Mega Scam,” said its stand has been vindicated. The BJP, however, questioned the timing of the indictment.

This is not the first time Mr. Adani is facing a legal tussle overseas. There are at least six other deals such as the Carmichael coal mine project in Australia, and Sri Lanka’s windpower project.

U.S.-based short-seller Hindenburg Research in 2023 accused the Adani conglomerate of improper extensive use of entities set up in offshore tax havens and expressed concern about high debt levels. It followed up with another report this year alleging that SEBI chairperson Madhabi Puri Buch and her husband had undisclosed investments in obscure offshore funds in Bermuda and Mauritius, the same entities allegedly used by Vinod Adani to round-trip funds and inflate stock prices.

Indian billionaire Gautam Adani speaks during an inauguration ceremony after the Adani Group completed the purchase of Haifa Port earlier in January 2023, in Haifa port, Israel January 31, 2023.
| Photo Credit: Reuters

Asserting that the relationship between India and the U.S. is built on a strong foundation, the White House has expressed confidence that it can navigate the ongoing crisis surrounding bribery charges against Indian billionaire Gautam Adani.

At her daily news conference, White House Press Secretary Karine Jean-Pierre told reporters on Thursday (November 21, 2024) that the administration is aware of the charges against Mr. Adani.

Mr. Adani has been charged by U.S. prosecutors for allegedly being part of a scheme to pay over $250 million (about ₹2,100 crore) bribe to Indian officials in exchange for favourable terms for solar power contracts.

“Obviously we’re aware of these allegations, and I would have to refer you to the SEC [Securities and Exchange Commission] and DOJ [Department of Justice] about the specifics of those allegations against the Adani Group,” she said.    

“What I will say is on the U.S. and India relationship, we believe that it stands on an extremely strong foundation anchored in ties between our people and cooperation across a full range of global issues,” Ms. Jean-Pierre said.

“What we believe and we’re confident about is that we’ll continue to navigate this issue as we have with other issues that may have come up as you just stated. And so the specifics of this, this is something that the SEC and DOJ can speak to directly, but again, we believe that…this relationship between India and the U.S. has been built on a strong foundation,” the Press Secretary said.