(Corrects paragraph 17 to remove language suggesting that Gautam Adani faces a criminal charge of foreign bribery, independent of the three criminal charges he faces)
BENGALURU (Reuters) -Indian billionaire Gautam Adani’s indictment by U.S. authorities for his alleged role in a $265 million bribery scheme has sent shockwaves through his eponymous ports-to-soybeans conglomerate. The Adani Group denies the allegations.
Here is what you need to know.
THE MAJOR U.S. INDICTMENT
Gautam Adani, one of world’s richest people, faces his biggest challenge after he was charged along with seven others over alleged bribery related to power supply deals in India, in what U.S. authorities called “The Corrupt Solar Project”.
Adani Group, which runs several key infrastructure projects across the globe, says the allegations are baseless and has vowed to seek “all possible legal recourse”.
The group’s CFO has said the indictment is linked to one Adani Green Energy (NS:ADNA) contract that makes up some 10% of the unit’s business.
Meanwhile, Indian Prime Minister Narendra Modi’s party has distanced itself from the billionaire amid opposition calls for a probe and allegations that Modi is shielding Adani, charges his ruling party deny.
There is also a growing spotlight on Sagar Adani, a millennial scion of the company who is alleged to have kept track of hundreds of millions of dollars paid to Indian officials in what U.S. authorities described as “bribe notes”.
The alleged bribes caught the attention of U.S. authorities when Adani’s companies were raising funds from U.S.-based investors in transactions starting in 2021.
DISCLOSURE ISSUES, STOCK ROUT AND FALLOUT
The scandal has also raised concerns about market and public disclosure lapses by Adani Group, with authorities alleging the company issued false statements earlier this year related to its knowledge of the U.S. investigation.
The U.S. indictment has kept Adani Group’s debt and equity under pressure, further exacerbated by credit ratings agencies including Fitch and Moody’s (NYSE:MCO) cutting their outlook for several of the listed companies owned by the conglomerate.
The indictment has had other ramifications across the globe, including some bankers considering pausing fresh lending to the group and oil major TotalEnergies (EPA:TTEF) halting any further investments into Adani Group.
Kenya has ordered the cancellation of Adani infrastructure deals worth more than $2.5 billion and a U.S. development agency is ‘assessing ramifications’ on a Sri Lanka Adani port project it had agreed to finance.
In Bangladesh, a government panel has sought legal help for its investigation of power deals including one with Adani, while in India, a key southern state which figured in the indictment charges, Andhra Pradesh, is considering suspending a power purchase deal with Adani.
WHAT NEXT FOR ADANI, LEGAL OPTIONS
A key question is what next for Gautam Adani? He is charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy.
Adani has not been arrested and his whereabouts are unknown, although he is believed to be in India.
A trial could still be a long way off, even if Adani is extradited or surrenders in the U.S.
If convicted, Adani could face decades in prison as well as monetary penalties, although any sentence would ultimately be up to the judge overseeing the case.
For now, Adani has to answer U.S. SEC allegations within 21 days, a court directive states.