Adani CFO denies wrongdoing in Rs 2,029 crore bribe case
Days after the United States indicted Gautam Adani and several others, Adani Group's Chief Financial Officer (CFO) Jugeshinder Singh addressed the charges, clarifying that the bribery accusations involve a single contract at Adani Green Energy.
In a statement following the indictment, Jugeshinder Singh emphasised that the bribery charges are related to just one contract, which constitutes about 10 percent of Adani Green Energy's total business. He also confirmed that none of Adani Group's 11 publicly listed companies are involved in the indictment.
Singh further clarified that no subsidiaries or portfolio companies of the publicly listed entities are facing allegations of improper conduct.
Details of the US indictment
The US Department of Justice (DoJ) filed charges against Gautam Adani, his nephew Sagar Adani, and six others, accusing them of being part of a large corruption scheme involving thousands of crores of rupees. The charges include defrauding American investors and obstructing investigations, which have posed significant legal and reputational challenges for the Adani Group.
The charges were issued by both a New York district court and the US Securities and Exchange Commission (SEC). These could lead to hefty fines and the recovery of profits, although settlement options are still available. The Federal Bureau of Investigation (FBI) also participated in the investigation.
Impact on Adani Group's market standing
In light of the legal developments, Adani Green Energy cancelled its $600 million bond offering, marking the second such cancellation in as many months. This cancellation, coupled with a decline in the group's shares and bonds, led to significant losses in market value as investors assessed the potential fallout from the indictment.
Bribery scheme details
According to the DoJ, the indictment involves allegations that Gautam Adani, Sagar Adani, Vneet Jaain, and others offered around Rs 2,029 crore in bribes to Indian government officials. In exchange, these officials were allegedly influenced to execute Power Sale Agreements (PSAs) for state electricity distribution companies.
The charges include conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and obstruction of justice related to Azure Power, a company funded by US investors. The Adani family members face additional securities and wire fraud charges.
Adani Group's response
The Adani Group has denied all allegations and stated that it plans to pursue legal recourse. The group’s CFO assured that a detailed response will be provided after thoroughly reviewing the legal documentation involved.