Adani Group Chairman Gautam Adani
Credit: PTI Photo
The indictment in the US of businessman Gautam Adani and his group, for securities fraud, financial wrongdoing and conspiracy, involves charges that are much more serious than the ones raised against the group by short-seller Hindenburg.
It is the US Securities and Exchange Commission, not a private entity, which has made the charges, and prosecutors have alleged that Adani Green Energy paid about $265 million (Rs 2,200 crore) in bribes to government officials from Indian states to secure power-supply contracts estimated to generate a profit of $2 billion over 20 years.
Arrest warrants have also been issued against the tycoon and his associates by a New York court. Prosecutors have charged that the group raised more than $3 billion from lenders and investors by hiding the bribes. Adani group shares have tanked in the aftermath of the indictment.
The charges have been supported with documents involving conversations and other material records showing that money raised from the US was used for bribes in India.
The court filings said Gautam Adani personally met a government official to advance the bribery scheme, the accused persons held discussions on how to execute the scheme, and used an electronic messaging application in this connection.
The indictment said the accused documented their plans and entered specific details about the bribes in their phones. The Hindenburg charges were mainly about stock market manipulations and were much less serious than these. Even those charges were not thoroughly investigated by the Indian government and the authorities.
Market regulator SEBI (Securities and Exchange Board of India) was found wanting and the Supreme Court’s initiative did not lead to satisfactory answers to the questions raised by Hindenburg. SEBI chairperson Madhabi Puri Buch also faced charges – raised by Hindenburg – which have not been seriously pursued.
The Adani group is considered close to Prime Minister Narendra Modi and the BJP but that should not provide the group a shield against charges of misconduct.
The group has denied the allegations but a blanket denial is not a credible response. Whenever allegations are raised against the Adani group, the BJP is seen to be directly or indirectly defending it. The party has now said that the law will take its course but the government has the responsibility to ensure that it does.
The Opposition parties have demanded a joint parliamentary probe into the charges. The indictment has all the makings of a new Bofors – charges coming from a foreign country, bribe payments for a contract, documents and diary-like records of payment, and code names – though the Congress would be wary of using the B-word.
India should be more interested than the US agencies in finding the truth about the charges.