US Drops Rs 2400 crore Adani Bribery Charge in Solar Power Purchase Rs
200 cr Single Bribe in Andhra
Ø Settlement in Exchange for Investment into US
Gautam Adani had been accused of lying
to American investors about payoffs in India. The end of the case came as
President Trump has signaled a transactional approach
to justice.
·
Federal prosecutors in Brooklyn asked a U.S. judge
to dismiss bribery-related criminal charges against Indian billionaire Gautam
Adani and seven co-defendants.
·
Prosecutors said they decided “not to devote
further resources” to pursuing the case.
·
The dismissal request was filed “with prejudice,”
meaning the charges cannot be brought again if approved by Judge Nicholas G. Garaufis.
·
The move represents a major reversal in one of the
Justice Department’s most significant recent international corruption
prosecutions.
Financial
Settlements and Investment Commitments
·
Separately, the U.S. Securities and Exchange
Commission announced that Gautam Adani and his nephew Sagar Adani agreed to pay
an $18 million fine to settle a parallel civil case.
·
The U.S. Department of the Treasury also announced
a $275 million settlement with Adani Enterprises Limited related to alleged
sanctions violations involving Iran.
·
Gautam Adani had also proposed investing $10
billion in the United States, although Justice Department officials reportedly
said the investment proposal did not influence the criminal case decision.
Background
of the Case
·
The original indictment was unsealed in November
2024 during the final weeks of the Biden administration.
·
Prosecutors accused Adani Group executives of
paying approximately $265 million in bribes to Indian officials between 2020
and 2024.
·
The alleged bribery scheme was linked to securing
solar energy contracts through Adani Green Energy.
·
Prosecutors alleged that Indian state governments
were persuaded through bribes to purchase expensive solar power despite
financial constraints.
·
According to the indictment, one alleged payment
included a $228 million bribe tied to an unnamed official in the Indian state
of Andhra Pradesh.
·
U.S. prosecutors argued that the company misled
American investors and made false statements regarding anti-corruption
compliance.
Legal
Arguments by Adani’s Defense
·
Adani’s lawyers argued that:
o
The alleged conduct occurred outside the United
States
o
U.S. securities laws did not apply
o
There was insufficient evidence linking Gautam
Adani directly to bribery payments
·
The defense also claimed
there was no evidence that American competitors were harmed.
·
During discussions with Justice Department
officials, Adani’s legal team reportedly presented more than 100 slides
challenging the prosecution’s jurisdiction and evidence.
Political
and Geopolitical Dimensions
·
Gautam Adani is considered one of India’s most
influential industrialists and a close ally of Indian Prime Minister Narendra
Modi.
·
Adani and Modi both originate from the Indian state
of Gujarat and have maintained a long-standing relationship.
·
The Adani Group has become closely associated with
India’s global infrastructure and strategic expansion efforts, including
projects in:
o
Israel
o
Vietnam
o
Australia
·
After Donald Trump won the 2024 U.S. presidential
election, Adani publicly praised him and later pledged major U.S. investments.
·
The decision to drop charges may intensify scrutiny
of the Trump administration’s approach toward white-collar crime and
politically connected individuals.
Broader
Justice Department Shift
·
The article notes that under Trump’s second term,
the Justice Department has reduced emphasis on:
o
Foreign bribery cases
o
Public corruption prosecutions
o
Complex white-collar investigations
·
The department has instead prioritized
immigration-related enforcement.
·
Critics have pointed to other controversial
prosecutorial reversals, including the abandonment of corruption charges
against former New York Mayor Eric Adams.
Market
and Corporate Impact
·
The indictment initially damaged Adani Group’s
international business prospects, with some governments and corporations
reconsidering infrastructure contracts.
·
The Adani Group had already faced major scrutiny
after short-seller Hindenburg Research accused it in 2023 of stock manipulation
and accounting fraud.
·
That report triggered a sharp collapse in Adani
Group market value and temporarily erased roughly half of Gautam Adani’s
personal wealth.
·
Despite the controversies, the Adani Group remains
one of India’s largest conglomerates with major operations in:
o
Ports
o
Mining
o
Shipping
o
Manufacturing
o
Renewable energy
o
Infrastructure development
Federal
prosecutors in Brooklyn on Monday asked a judge to drop bribery-related charges
against the Indian tycoon Gautam Adani, a decision with domestic and geopolitical
ramifications that appeared to typify the transactional nature of the Justice Department
under President Trump.
In
a brief letter, prosecutors said they had decided “not to devote further resources”
to the case against Mr. Adani and seven others. He had offered to invest $10
billion in the United States, while his lawyers had proposed a settlement of both
the criminal matter and a parallel civil case brought by the Securities and Exchange
Commission.
The
S.E.C. announced that Mr. Adani and his nephew, Sagar Adani, would pay an $18 million
fine on Thursday to resolve its case. Earlier on Monday, the Treasury Department
announced that it had reached a $275 million settlement with Adani Enterprises
Limited to resolve a separate investigation into whether Mr. Adani violated sanctions
against Iran.
Robert
J. Giuffra Jr., a lawyer for Gautam Adani, declined to comment, as did Timothy D.
Sini, a lawyer for Sagar Adani.
The
Justice Department did not cite the proposed $10 billion investment as a rationale
for dropping the case. Justice Department officials had earlier told Mr. Giuffra,
who has also acted as Mr. Trump’s personal lawyer, that the proposal would play
no role in the resolution of Mr. Adani’s criminal case, as news reported last
week.
The
letter seeks to dismiss the case with prejudice, which would mean the charges cannot
be brought again, and was signed by R. Trent McCotter, the principal associate deputy
attorney general, and Joseph Nocella Jr., the U.S. attorney for the Eastern District
of New York. Judge Nicholas G. Garaufis must rule on the
motion to formally dismiss the case.
In
November 2024, during the final weeks of the Biden administration, federal prosecutors
in Brooklyn unsealed an indictment against Mr. Adani, his nephew and six others.
The case, along with the S.E.C. case against Mr. Adani announced at the same time,
had been in an unusual limbo since then.
The
defendants were not living in the United States at the time they were indicted,
and they have not been extradited. None of them have entered a plea. Still, it is
atypical for prosecutors to drop charges at such an early stage of a case, particularly
for one of the Justice Department’s most ambitious white-collar prosecutions in
recent years.
Mr.
Adani, 63, is a titan of industry in India whose fortune has grown explosively with
India’s rise as a global economic power under Prime Minister Narendra Modi, a close
ally. He has a net worth of more than $100 billion, according to Bloomberg’s
Billionaire Index. The share price of his flagship conglomerate company, the Adani
Group, has risen sharply during Mr. Modi’s 11 years in power.
The
conglomerate has businesses in shipping, mining, manufacturing, port operations
and more. It was a renewable energy company called Adani Green Energy that attracted
scrutiny from U.S. authorities, in what they called a corrupt bid to secure lucrative
solar contracts in India. Although the defendants paid bribes in India, prosecutors
said, the company solicited investments from people in the United States and was
subject to American laws.
Breon
Peace, the former U.S. attorney for the Eastern District of New York, said in a
statement after Mr. Adani was indicted that the office had been “committed to rooting
out corruption in the international marketplace.”
Mr.
Adani and his conglomerate have consistently denied the allegations. In recent court
filings, Mr. Adani’s lawyers wrote that there was no evidence that the alleged payments
harmed American competitors. The case, they further said, was “conclusively beyond
the reach of the U.S. securities laws.”
The
move to drop the charges against Mr. Adani comes as the Justice Department in Mr.
Trump’s second term has shifted away from prosecuting crimes like public corruption
and foreign bribery, and toward immigration offenses.
The
department has prosecuted some of Mr. Trump’s political enemies and abandoned cases
against those perceived to be his allies. Last year, the Justice Department decided
to end its prosecution of Eric Adams, then the mayor of New York City, after a dramatic
struggle with prosecutors in the case. The charges against Mr. Adams included wire
fraud conspiracy and bribery. Federal prosecutors in Manhattan who handled the case
resigned in protest, as did the interim U.S. attorney at the time, Danielle R. Sassoon.
In
2024, in the weeks before Mr. Adani was charged in the Eastern District, he made
no secret of his support for Mr. Trump. A day after Mr. Trump’s election victory,
Mr. Adani congratulated him in a social media post, calling him an “embodiment of
unbreakable tenacity, unshakable grit, relentless determination and the courage
to stay true to his beliefs.”
One
week later, on Nov. 13, Mr. Adani promised $10 billion in investments in the United
States.
Like
Mr. Trump, Mr. Modi and his Bharatiya Janata Party have embodied strongman politics,
and the two leaders have publicly touted their friendship. Recently, the two leaders
have had a more strained relationship. Mr. Trump’s open campaigning for the Nobel
Peace Prize last year after claiming he “solved” the military conflict between India
and Pakistan infuriated Mr. Modi.
When
Mr. Modi visited the White House last year, a reporter asked him during a news conference
about whether he and Mr. Trump had discussed the case against Mr. Adani. Speaking
through an interpreter, the prime minister called the case “a personal matter” and
said that he and Mr. Trump did not talk about such issues.
According
to the indictment, Adani Green Energy won a contract with a state-owned company
in India to invest $6 billion in solar energy. At the time, the energy company called
the plan to build eight gigawatts of solar projects the biggest effort of its kind,
and said it would generate a profit of $2 billion over two decades.
But
Indian states couldn’t afford to buy the solar power that the company produced,
threatening the profit of the investment, according to prosecutors. So Mr. Adani,
along with seven co-defendants, paid Indian officials $265 million between 2020
and 2024 to persuade them to purchase the energy, prosecutors said.
These
payments included a $228 million bribe to an unnamed official in the state of Andhra
Pradesh, who Mr. Adani met with, the indictment said. Mr. Adani’s co-defendants
referred to Mr. Adani as “Mr. A,” “Numero uno” and “the
big man” while keeping track of the bribes, prosecutors said.
By
paying the bribes, the energy company misled American investors, prosecutors said.
The company then further deceived investors and made misleading statements about
its commitments to anti-corruption and anti-bribery efforts, according to the indictment.
In
a meeting with Justice Department officials last month, Mr. Giuffra, Mr. Adani’s
lawyer, presented more than 100 slides outlining what he saw as the weakness of
the prosecution, The Times reported. The arguments included that prosecutors lacked
jurisdiction, since the alleged conduct took place outside the United States, and
that there was insufficient evidence that Mr. Adani had paid a bribe.
One
slide said that if the charges were dropped, Mr. Adani would be willing to invest
$10 billion in the American economy, echoing his pledge from November 2024.
Like
Mr. Modi, Mr. Adani hails from the state of Gujarat, and the two have been friends
for a quarter century. Mr. Modi has assisted Mr. Adani’s businesses, including by
helping him win major contracts. In turn, Mr. Adani’s empire has become a tool of
soft power for India since Mr. Modi became prime minister, by fostering its global
presence in public works projects. The Adani Group has made large investments in
ports, hydroelectric plants and more in places like Israel, Vietnam and Australia.
Those
cozy ties have drawn scrutiny. In 2023, Hindenburg Research, a now-defunct investment
research firm based in New York, published a report that accused the Adani Group
of stock manipulation and accounting fraud. The report shook Indian markets, and
Mr. Adani’s wealth plummeted by half in just a week.
The
announcement of the prosecution also hurt Mr. Adani’s businesses. Days after he
was indicted, several countries and multinational companies threatened to cancel
or review contracts with the Adani Group for public works projects. But speculation
arose that the case would be dropped by a Trump Justice Department less focused
on white-collar crime.