New Delhi: The US Justice Department Wednesday unsealed a criminal indictment accusing Adani Group chairman Gautam Adani and his business associates of offering $265 million in bribes to Indian government officials for securing solar energy contracts.
Arrest warrants were issued in the US for Gautam Adani and nephew Sagar Adani, an executive director on the board of Adani Green Energy, after a grand jury in New York indicted them and six others on five counts, including conspiracy to violate the Foreign Corrupt Practices Act and wire fraud. Responding to the indictment, the Adani Group in a statement issued Thursday categorically denied the allegations, terming them “baseless”.
With business interests in sectors ranging from energy and utilities, and logistics to edible oils and foods, and defence and aerospace, Adani Group is no stranger to controversy.
ThePrint looks at some allegations levelled against the conglomerate over the last 15 years.
Also Read: Code name for Adani, PPT on bribes, cellphone notes on corrupt officials—Inside US indictment
Carmichael coal mine in Australia
In 2010, the Adani Group announced an open-cut and underground coal mining project in Australia that would export 60 million tonnes of coal a year, primarily to India. The ‘Carmichael mine’ project, originally valued at $12 billion, also includes a 400-km railway line and was one of the few projects planned in outback Queensland.
In October 2015, the Australian government finally approved the project after a protracted legal battle with environmentalist groups who claimed authorities failed to consider its impact on the Great Barrier Reef.
The BBC reported that the approval was subject to “36 of the strictest conditions in Australian history”. It quoted Australian Conservation Foundation (ACF) president Geoff Cousins terming the approval “grossly irresponsible” as it would “deplete 297 billion litres of precious groundwater and produce 128.4 million tonnes of CO2 (carbon dioxide) a year”.
In 2018, the Adani Group shrank the capacity of the mine to 10 million tonnes a year and decided to self-finance the project on the back of an incessant “Stop Adani” campaign which reportedly turned away financiers, engineering firms and insurance companies. Capital cost of the project, too, was revised to an estimated $2 billion in 2018.
Construction of the mine finally began in 2019.
In light of longstanding opposition to the mine, the Adani Group in November 2020 rebranded its Australian subsidy to Bravus Mining and Resources.
The first shipment of coal from the mine was assembled for export in December 2021.
How did Adani Group react
The Adani Group defended the Carmichael coal mine in Galilee Basin, Queensland, by underscoring its adherence to stringent environmental regulations. It asserted that the mine complies with more than 100 conditions imposed by both state and federal authorities to safeguard groundwater and the ecologically sensitive Doongmabulla Springs.
Further, it highlighted that water levels in these springs are closely monitored to ensure they do not fall below 20 cm. The group also established a comprehensive network of over 100 groundwater monitoring systems to assess and mitigate environmental impacts.
In an interview in July 2019, Gautam Adani remarked, “If the project wasn’t viable, we wouldn’t have pursued it.” He emphasised the project’s significance, noting that while renewable energy is beneficial for nations, it alone cannot satisfy the baseload energy needs of the population.
Also Read: Code name for Adani, PPT on bribes, cellphone notes on corrupt officials—Inside US indictment
Gondulpara coal mine in Jharkhand
In November 2020, Adani Enterprises won a bid for the Gondulpara coal mine in Jharkhand’s Hazaribagh. The mine is expected to produce 4 million tonnes of coal on an annual basis—its peak rated capacity—by fourth year of operations. But the project has run into rough weather with local residents refusing to give up their land.
In June 2023, Adani informed the Ministry of Coal that the mine will be operational one year ahead of scheduled time.
Meanwhile, in August 2024, the Ministry of Environment, Forest and Climate Change granted Adani environmental clearance for a Rs 7,465-crore coal mine project in Chhattisgarh’s Raigarh. The approval, six months after National Green Tribunal (NGT) revoked the environmental clearance, drew criticism from the Opposition and residents.
The project, involving open-cast mining in a lush and fertile region covering 513 hectares, could potentially impact approximately 1,950 households, including tribal communities.
How did Adani Group react
In defence of the project, Adani Enterprises asserted its compliance with legal and environmental standards. It expressed its dedication to sustainable development and intention to engage with stakeholders. The company also outlined strategies to reduce environmental impact, including plans for rehabilitation and afforestation.
10-yr battle with DRI
In May 2014, the Directorate of Revenue Intelligence (DRI) issued a Rs 5,500-crore show-cause notice (SCN) to two Adani Group companies. The notices alleged an over-invoicing of imports of coal and an overvaluation of capital equipment imports for power projects.
In 2017, an ‘adjudication authority’ of DRI dismissed the findings and rejected both SNCs, which led DRI to appeal the orders before the Customs Excise and Service Tax Tribunal (CESTAT). In July 2022, the CESTAT dismissed the appeal, observing that the DRI had failed to collect evidence as mandated under the customs law. The DRI then moved the Supreme Court against relief granted to the Adani Group companies.
Though the top court dismissed DRI’s petition in March 2023, it reinstated the department’s power to issue SCNs and recover duties earlier this month.
How did Adani Group react
In response to DRI’s show-cause notice, Adani Group asserted its compliance with legal and regulatory standards in a statement in July 2021.
“We have always been transparent with all our regulators and have full faith in them. While we have always been fully compliant with applicable SEBI regulations, we have made full disclosure to SEBI on specific information requests from them in the past. However, we have not received any communication or information requests recently,” it read.
The group reiterated its adherence to all relevant laws, emphasising a robust governance framework. It also confirmed its continued cooperation with authorities, underscoring its role as a responsible corporate entity.
Hindenburg Research allegations
On 24 January, 2023, US-based short-seller Hindenburg Research released a report alleging that the Adani Group was “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades”.
It alleged that the conglomerate illegally routed money through shell companies and raised concerns over the level of debt in the group’s companies. The fallout of the report was prompt, with the market value of Adani Group companies dropping by $150 billion.
In March 2023, the Supreme Court ordered the Securities and Exchange Board of India (SEBI) to investigate the allegations of stock manipulation.
Cut to August 2024, Hindenburg Research published another report, this time alleging SEBI had not taken any action against the Adani Group. It also alleged that SEBI chairperson Madhabi Puri Buch and her husband Dhaval Buch had stakes in offshore entities allegedly used by the Adani Group to syphon money. SEBI subsequently released a statement referring to the Supreme Court order of 3 January 2024, which noted that the regulator completed “22 out of 24 investigations into the Adani Group”. SEBI added that another investigation was completed in March 2024 with only one more pending. On allegations levelled against Buch, it said “relevant disclosures required in terms of holdings of securities and their transfers have been made by the Chairperson from time to time”.
The statement maintained that Buch had recused herself involving matters of potential conflicts of interest.
How did Adani Group react
The Adani Group responded to the allegations, calling it an “attack on India,” in a 413-page rebuttal. It also announced plans to take legal action against Hindenburg Research in both the US and India. To refute Hindenburg’s claims, the conglomerate emphasised, “We maintain a strong corporate governance framework that meets international standards.”
Less than a week after Hindenburg released its first report, the conglomerate had called off a $2.5-billion share sale. And in February 2023, it cancelled its Rs 20,000-crore FPO (Follow-on Public Offer), deciding to return money to investors on account of market risks.
Suspension of projects in Kenya
In October, Kenya’s High Court suspended a public-private partnership between Adani Energy Solutions and state-owned Kenya Electrical Transmission Company (KETRACO). The $736-million deal involved building and operating power infrastructure. The High Court told the Kenyan government that the deal could not proceed until the court made a decision on the case brought forward by the Law Society of Kenya (LSK). According to a report by Reuters, LSK called the deal “a constitutional sham” and accused both KETRACO and Adani Energy Solutions of not carrying out “meaning public participation around the project”.
Earlier, the same month, the High Court froze the Adani Group’s proposal to expand Jomo Kenyatta International Airport in Nairobi, on the back of protests, senate hearings and lawsuits against the conglomerate.
Reacting to the indictment, the Kenyan government Thursday cancelled the procurement process for the expansion of the airport, as well as the deal involving KETRACO.
The Adani Group has yet to issue any official statement in this regard.
(Edited by Amrtansh Arora)
Also Read: How Gautam Adani’s business partners tried to place entire ‘bribery blame’ on him, nephew Sagar