In a major development, U.S. prosecutors have presented court filings implicating Sagar Adani, a key figure in the Adani Group and nephew of Gautam Adani, in a $265 million bribery scandal. The filings suggest that Sagar Adani meticulously tracked bribes on his mobile phone, allegedly offered to Indian government officials to secure lucrative power-supply contracts. The scandal, which also names Gautam Adani and six others, has drawn global attention for its scale and audacity.
Bribe Notes Unveiled: Allegations Against Sagar Adani
The court filings describe detailed records maintained by Sagar Adani, referred to as “bribe notes,” which document amounts offered, officials targeted, and anticipated returns from the deals. In one instance, a WhatsApp message from February 25, 2021, outlined discussions about securing green power deals in Jammu and Kashmir and Chhattisgarh. Sagar Adani reportedly wrote: “Just so you know, we have doubled the incentives to push for these acceptances.”
Another alleged incident involves Odisha in July 2021, where a bribe worth hundreds of thousands of dollars was offered in exchange for a 500-megawatt power purchase agreement. The filings also mention a more substantial bribe of $200 million allegedly offered to Andhra Pradesh government officials, including the chief minister, for a 7,000 MW power deal.
Gautam Adani’s Involvement and High-Level Meetings
The scandal extends to Gautam Adani, one of the world’s richest men and head of the Adani Group. Between April and June 2022, Gautam Adani, Sagar Adani, and other executives reportedly held multiple meetings in India with Azure Power executives. The discussions allegedly centered on securing contracts through bribes promised or paid to state officials. U.S. prosecutors claim that Gautam Adani, with Sagar Adani’s assistance, sought to recover Azure’s share of the bribes during these meetings.
This case marks a significant escalation in the scrutiny faced by the Adani Group, which had earlier been hit by allegations of financial mismanagement and stock manipulation.
Optics of Corruption: Sagar Adani’s WhatsApp Messages
One message that has garnered attention is a WhatsApp exchange from 2020, in which Sagar Adani allegedly remarked, “Yup… but the optics are very difficult to cover.” This statement, prosecutors argue, reflects an awareness of the risks associated with the bribery scheme. Despite these concerns, the alleged operations continued, culminating in power contracts projected to yield $2 billion in profit over 20 years.
The filings indicate a sophisticated system where bribes were calculated down to the per-megawatt rate, and officials were identified with abbreviated titles to maintain discretion. Such details underscore the organized nature of the alleged corruption.
Adani Group’s Defense and Market Fallout
In response to these allegations, Adani Group CFO Jugeshinder Robbie Singh has refuted claims of wrongdoing. Singh stated on social media, “None of the issuers (companies in our portfolio or specific issuers that are subsidiaries of the public companies) are accused of any wrongdoing in the said legal filing.”
Despite the group’s defense, the scandal has taken a toll on Adani Group’s market value. Indian stocks of the conglomerate saw an erosion of ₹2.60 lakh crore in market capitalization following the news. The fallout extended globally, with Kenya canceling a major airport project with the Adani Group. Shares of GQG Partners, an Australian firm holding a 19.37% stake in multiple Adani companies, also plunged in Australian markets.
A Crisis Amidst Hindenburg Allegations
This scandal comes less than two years after the Adani Group faced allegations from Hindenburg Research of stock manipulation and accounting fraud. The cumulative impact of these controversies has significantly dented the group’s global reputation and market performance.
The current case involves both criminal and civil charges, with U.S. prosecutors seeking accountability for the alleged bribery scheme and the U.S. Securities and Exchange Commission filing a parallel civil case.
Global Implications and Future Outlook
The Adani Group’s extensive business reach means the repercussions of this scandal are not confined to India. The allegations have raised questions about the governance and operational ethics of one of the world’s largest business conglomerates. For Sagar Adani, who has been regarded as a rising star within the group, the case represents a dramatic fall from grace.
The revelations in the U.S. court filings add a new layer of complexity to the group’s legal challenges and market prospects. With investigations ongoing and global scrutiny intensifying, the Adani Group faces an uphill battle to restore investor confidence and rebuild its tarnished reputation.
As the legal proceedings unfold, the spotlight will remain firmly on Sagar Adani, Gautam Adani, and their associates, with significant implications for the future of the Adani Group and corporate governance in India.