The march to force down Adani deals on Kenyans is facing a bumpy ride, after one of the central arguments on why the government chose the controversial Indian falls apart.
Despite repeating multiple times that Adani’s deal is above board, the president and the line ministries involved in the deals have refused to provide the contracts. Adani is lined up for hundreds of billions in deals, among them Ketraco, JKIA and SHIF.
Now overnight, we learnt that the Indian billionaire behind all this, Gautam Adani and several of his executives have been indicted in New York for their involvement in an alleged multi-billion-dollar fraud related to the development of a major solar power plant.
The news was announced by the US Department of Justice (DOJ) announced on Wednesday.
The charges involve allegations that Adani, a key ally of Indian Prime Minister Narendra Modi, along with seven other executives, including his nephew Sagar Adani, promised more than $250 million in bribes to Indian government officials to secure solar energy contracts. The alleged bribery scheme took place between 2020 and 2024, with Adani reportedly meeting personally with a government official to advance the plan.
The DOJ further alleged that the bribery and fraud aimed at securing solar energy supply contracts that were projected to generate more than $2 billion in profits over an approximate 20-year period. Adani and his associates allegedly tried to hide these schemes from US investors to obtain financing, including funding the solar contracts procured through bribery.
Deputy Assistant Attorney General Lisa Miller stated on Wednesday, “This indictment alleges schemes to pay over $250 million (Ksh32.4 billion) in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice.”
Miller also noted that senior executives and directors allegedly committed these offenses to secure and finance state energy supply contracts through corruption and fraud, which harmed US investors.
The impact of these allegations on Adani Group was immediate, with shares in the conglomerate’s listed firms plummeting between 10% and 20% on Thursday. This development comes over a year after a US short-seller accused Adani Group of stock manipulation and accounting fraud.
The Indian National Congress, a rival of Modi’s Bharatiya Janata Party (BJP), has renewed its calls for a parliamentary investigation into Adani’s companies.
The DOJ’s investigation revealed extensive documentation related to the bribery scheme, including photographs of documents summarizing various bribe amounts, as well as PowerPoint and Excel analyses detailing options for making and concealing bribe payments. Evidence from several phones was also referenced, indicating frequent meetings among the defendants to discuss the bribery scheme.
In a parallel action, the Securities and Exchange Commission (SEC) also charged Gautam and Sagar Adani, along with Cyril Cabanes, an executive at Azure Power Global, with their involvement in the scheme.
The SEC said Adani Green Energy Ltd raised more than $175 million from US investors on misrepresentations stemming from the alleged bribery scheme.
Adani’s reputation has been under pressure since January 2023, when US short-seller Hindenburg Research accused Adani Group of engaging in a “brazen stock manipulation and accounting fraud scheme.”
Following these allegations, Adani’s fortune plummeted by over $80 billion, having previously been valued higher than Jeff Bezos’ wealth at one point in 2022.
The Hindenburg investigation took two years and raised questions about Adani companies’ “sky-high valuations” and their substantial debt, which, according to Hindenburg, put the entire group “on a precarious financial footing.” Adani Group responded with a 400-page rebuttal, dismissing the allegations as “nothing but a lie.”
Adani, who is Asia’s second-richest person after Mukesh Ambani according to Bloomberg’s Billionaires Index, founded the conglomerate Adani Group, which has businesses in sectors including ports, power, media, and clean energy.
He began his career in diamond trading before setting up a commodity trading business in 1988, which eventually evolved into Adani Enterprises.
