US accuses tycoon Gautam Adani of defrauding an investor…

NEW YORK (AP) — An Indian businessman who is one of the world’s richest men has been indicted in the U.S. on charges of defrauding investors by hiding that his company’s massive solar power project on the subcontinent was being facilitated by a alleged bribery scheme.

Gautam Adani62, was charged in a federal indictment unsealed Wednesday with securities fraud and conspiracy to commit securities and wire fraud. The case involves a lucrative arrangement for Adani Green Energy Ltd. and another firm to sell 12 gigawatts of solar power to the Indian government – enough to light millions of homes and businesses.

In the indictment, Adani and his co-defendants play two sides of the deal.

He accuses them of portraying it as rosy and outright to the Wall Street investors who poured several billion dollars into the project over the past five years, while back in India they were allegedly paying or planning to pay about $265 million in bribes to the government. officials to help secure billions of dollars worth of contracts and funding.

The tycoon and his co-defendants attempted to “obtain and finance massive state energy contracts through corruption and fraud at the expense of American investors,” Assistant Attorney General Lisa Miller said.

U.S. Attorney Breon Peace said the defendants “orchestrated an elaborate scheme” and sought to “enrich themselves at the expense of the integrity of our financial markets.”

Adani’s India company had no immediate comment as shares in the Adani corporate empire fell in India on Thursday.

Adani’s co-defendants include his nephew Sagar Adani, the executive director of the board of Adani Green Energy, and Vneet Jaain, who was the company’s chief executive from 2020 to 2023 and remains the managing director of its board.

Online court filings did not list a lawyer who could speak for Adani. An email message seeking comment was left with an arm of its conglomerate, the Adani Group. Emails have also been sent to lawyers representing his co-defendants.

Sagar Adani’s attorney, Sean Hecker, declined to comment. The others did not immediately respond.

In a parallel civil action, the US Securities and Exchange Commission charged Adani and two co-defendants with violating the anti-fraud provisions of US securities laws. The regulator is seeking monetary and other sanctions.

Both cases were filed in federal court in Brooklyn.

Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, said Gautam and Sagar Adani are accused of persuading investors to buy their company’s bonds by misrepresenting “not only that Adani Green had a robust anti-bribery compliance program, but that the company’s senior management had not and would not pay or promise to pay bribes.”

Adani is a power player in the world’s most populous nation. He built his fortune in the coal business in the 1990s. The Adani Group has grown to involve many aspects of Indian life, from manufacturing defense equipment to building roads to selling cooking oil.

In recent years, the Adani Group has made big moves in the field of renewable energy, embracing a philosophy of sustainable growth reflected in its slogan: “Growth with Kindness”.

The company has a clean energy portfolio of more than 20 gigawatts, including one of the world’s largest solar plants in the southern state of Tamil Nadu. The Adani Group has stated its goal to become the country’s largest player in the space by 2030. In 2022, Gautam Adani said the company would invest $70 billion in clean energy projects by 2032.

Adani’s close ties to the government and Prime Minister Narendra Modi have also drawn criticism, including from the leader of India’s opposition Congress party, Jairam Ramesh. He said in a statement that the indictment was “consistent with a long history of fraud and criminality carried out with impunity, with the Prime Minister’s apparent protection”.

Noting that a foreign jurisdiction was needed to bring charges, Ramesh called for a parliamentary inquiry into Adani’s activities.

Last year, Hindenburg Research, a US financial research firm accused Adani and its company of “outrageous stock manipulation” and “accounting fraud”. Adani Group called the claims “a malicious combination of selective disinformation and outdated, baseless and discredited allegations”.

Hindenburg is known as a short seller, a Wall Street term for traders who essentially bet that certain stock prices will fall, and had made such investments in connection with the Adani Group. As a result, the company’s stock fell, and fell again in August when Hindenburg raised more corruption charges.

Jain he told The Associated Press last year that Hindenburg’s allegations had little impact on Adani’s ongoing projects, including work to build 20 gigawatts of a solar and wind project in the village of Khavda in northwest India.

Prosecutors allege that Adani and his co-defendants began setting up the bribery scheme in 2020 or 2021 to guarantee demand for power that Adani Green and another firm were contracted to produce for the government’s Solar Power Corporation of India national.

Adani Green and the other firm’s high prices have stymied India’s state-run electricity distributors, which buy power from the national government and supply it to homes and businesses. But the companies needed those deals to make the project worthwhile and keep revenues high, so they offered bribes to get them done, prosecutors said.

After the defendants began promising bribes to government officials, in 2021 and 2022, electricity distributors in five Indian states or regions entered into agreements to purchase their power, prosecutors said. Adani’s company issued a statement in which it presented its bids as the “largest” power purchase agreement in the world.

At the same time, prosecutors said, the Adani family and Jaain are certifying to global investors that Adani Green has never been and will never be involved in bribery. Those claims allowed them to secure billions of dollars in financing for the project on terms that “disregard the true risk” involved, prosecutors said.