India’s Adani Group on Thursday called US charges that their billionaire founder Gautam Adani had paid more than $250 million in bribes “baseless”, as the opposition leader demanded the tycoon’s arrest.
The stiff denial came after shares in the industrialist’s conglomerate nosedived more than 23 percent in Mumbai, the morning after a bombshell indictment in New York accused him of deliberately misleading international investors.
Adani, once the world’s second-richest man, is a close ally of Hindu nationalist Prime Minister Narendra Modi and critics have long accused him of improperly benefitting from their relationship.
“The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied,” the conglomerate said in a statement.
“All possible legal recourse will be sought,” it added.
But Congress party leader Rahul Gandhi said the businessmen should be taken into custody.
“We demand that Adani be immediately arrested. But we know that won’t happen as Modi is protecting him,” Gandhi told reporters in New Delhi.
“Modi can’t act even if he wants to, because he is controlled by Adani.”
Wednesday’s indictment accuses Adani and multiple subordinates of paying more than $250 million in bribes to Indian officials for lucrative solar energy supply contracts.
The deals were projected to generate more than $2 billion in after-tax profits over roughly 20 years.
None of the multiple defendants named in the case are in custody.
– ‘Lied’ –
Adani and two other board members of his Adani Group “lied about the bribery scheme as they sought to raise capital from US and international investors”, US attorney Breon Peace said in a statement.
Shares in Adani Enterprises, the conglomerate’s main listed unit, plunged 23.4 percent on the Mumbai bourse during a day of frenzied sell-offs that triggered multiple trading halts.
The group’s renewable energy subsidiary, Adani Green Energy, said it had decided to halt a planned bond sale “in light of these developments”.
In Kenya, President William Ruto said in a shock announcement that Adani Group would no longer be involved in plans to expand the East African country’s electricity network and its main airport.
The Adani Group was to invest $1.85 billion in the Jomo Kenyatta airport and $736 million in state-owned utility KETRACO.
But Ruto said Thursday his reversal was based on “new information provided by investigative agencies and partner nations”.
In October, Gautam’s nephew and boardmember Sagar Adani — also named in the indictment — told AFP there was “no political connection” between Adani Group and Modi’s government.
“All the projects we got have not been granted by any concession but through an independent and transparent auction system,” he said.
Modi’s government has yet to comment on the charges but a spokesman for his ruling Bharatiya Janata Party (BJP), Amit Malviya, said the indictment appeared to implicate opposition parties rather than his own.
– ‘Fear of reprisal’ –
With a business empire spanning coal, airports, cement and media, Adani Group has weathered previous corporate fraud allegations and suffered a similar stock crash last year.
The conglomerate saw $150 billion wiped from its market value in 2023 after a report by short-seller Hindenburg Research accused it of “brazen” corporate fraud.
It claimed Adani Group had engaged in a “stock manipulation and accounting fraud scheme over the course of decades”.
The report also said “government leniency towards the group” had left investors, journalists, citizens and politicians unwilling to challenge its conduct.
Denying Hindenburg’s allegations, Adani called its report a “deliberate attempt” to damage its image for the benefit of short-sellers.
He saw his net worth shrink by around $60 billion in the two weeks following the report’s release.
– ‘Abject failure’ –
Adani Group’s rapid expansion into capital-intensive businesses has raised alarms in the past, with Fitch subsidiary and market researcher CreditSights in 2022 warning it was “deeply over-leveraged”.
Jairam Ramesh, a spokesman for Gandhi’s Congress party, said Thursday the indictment “vindicates” their demand for a parliamentary inquiry into Adani.
Ramesh condemned what he called “abject failure” by the Securities and Exchange Board of India to hold Adani Group “to account for the source of its investments”.
Adani, born to a middle-class family in Ahmedabad, Gujarat state, dropped out of school at 16 and moved to Mumbai to find work in the financial capital’s lucrative gem trade.
After a short stint in his brother’s plastics business, he launched the flagship family conglomerate that bears his name in 1988 by branching out into the export trade.
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