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The US Securities and Exchange Commission (SEC) has issued summonses to Gautam Adani, founder and chairman of the Adani Group, and his nephew, Sagar Adani, in connection with allegations of a massive bribery scheme. The summonses, delivered to their respective residences in Ahmedabad, India, demand a response within 21 days to accusations of paying $265 million (approximately ₹2,200 crore) in bribes to secure lucrative solar power contracts in India. This action follows an indictment unsealed in a New York court, alleging that between 2020 and 2024, Gautam Adani, Sagar Adani, and others conspired to bribe Indian government officials to obtain solar energy contracts projected to yield $2 billion in profit over two decades. The indictment, originating from the US Department of Justice, details an intricate scheme involving the alleged payment of bribes to secure these contracts, highlighting the significant financial implications and potential ramifications for the Adani Group.
Sagar Adani's involvement is particularly noteworthy, given his position as a director at Adani Green Energy Ltd. The SEC's summons specifically targets his role in the alleged bribery scheme, demanding clarification on his actions and knowledge of the alleged illicit payments. The allegations extend beyond the direct bribery charges. Prosecutors assert that the Adani Group raised $2 billion in loans and bonds from US and international firms based on false and misleading statements concerning its anti-bribery practices and policies. This raises concerns about the potential impact on investors who may have relied on these misrepresentations when making their investment decisions. The alleged deception underscores the gravity of the charges and the potential for widespread financial consequences.
The Adani Group has vehemently denied all allegations, asserting its unwavering commitment to the highest standards of governance, transparency, and regulatory compliance. The group's statement assures stakeholders of its law-abiding nature and full compliance with all relevant laws. However, the SEC's summons represents a significant legal challenge, demanding a comprehensive and timely response. Failure to comply could result in a default judgment against the Adani Group, further escalating the legal and financial risks. The investigation, initiated in 2022, faced alleged obstruction efforts, highlighting the complexities and potential challenges involved in uncovering the full scope of the alleged scheme. The case also highlights the growing international scrutiny of corporate governance and anti-corruption practices, especially within the context of significant cross-border investments and financial transactions.
The US Attorney, Breon Peace, emphasized the seriousness of the alleged actions, describing the scheme as “elaborate” and highlighting the defendants' alleged efforts to deceive US and international investors while seeking capital. The investigation's reach extends beyond the Adani Group, encompassing Cyril Cabanes, an executive at Azure Power Global, who is also implicated in the alleged bribery scheme. The involvement of multiple entities and individuals underscores the complex nature of the alleged conspiracy and the challenges faced by investigators in unraveling the intricate web of transactions and communications. The case's implications are far-reaching, impacting not only the Adani Group's reputation and financial stability but also raising broader questions about the effectiveness of anti-corruption measures and the integrity of international financial markets.
The SEC's investigation is separate but related to the indictment brought by the US Department of Justice. Both actions underscore the seriousness of the allegations and the concerted effort by US authorities to address potential breaches of US laws and regulations. The timing of the summons, requiring a response within 21 days, indicates the urgency of the situation and the SEC's determination to pursue a swift and thorough investigation. The outcome of this case will have significant implications for the Adani Group, its stakeholders, and the broader business landscape in India and internationally. The case serves as a stark reminder of the importance of robust corporate governance, transparency, and ethical conduct in international business dealings. It also highlights the increasing role of international regulatory bodies in addressing cross-border corruption and ensuring the integrity of global financial markets.
Source: Gautam Adani, nephew Sagar summoned by US Securities and Exchange Commission in bribery case