Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
US prosecutors charged Gautam Adani with helping drive a $250 million bribery scheme, threatening to throw the Indian tycoon’s conglomerate back into turmoil just as it rebounded from a short-seller’s fraud allegations.
Federal prosecutors alleged on Wednesday that Adani, one of the world’s richest people, and other defendants promised to pay more than $250 million in bribes to Indian government officials to win solar energy contracts, and concealed the plan as they sought to raise money from US investors. The five-count indictment also accuses Gautam’s nephew Sagar R. Adani and Vneet S. Jaain, both executives at an Indian renewable-energy company, of breaking federal laws.
“The defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars,” Breon Peace, US Attorney for the Eastern District of New York which brought the case, said in a statement. US law allows federal prosecutors to pursue foreign corruption allegations if they involve certain links to American investors or markets.
Requests for comment to a representative for Adani Group’s US offices weren’t immediately returned. Lawyers for Sagar Adani and Jaain didn’t immediately respond to requests for comment. None of the defendants have been taken into custody.
The charges are a major new headache for Adani, 62, an influential businessman in India who’s seen as close to Prime Minister Narendra Modi and his government. Adani Group has a wide-ranging presence across the South Asian country and beyond, in businesses including ports, coal mines, highways and airports. The group attracts capital from investors across the world.
The indictment comes after Adani Group companies’ shares recovered following a plunge caused by a January 2023 report by US-based short seller Hindenburg Research. It alleged that the conglomerate manipulated its stock price and committed accounting fraud, which the group vigorously denied.
After also initially cratering on the short-seller’s claims, Adani’s fortune has rebounded as well. He’s the world’s 18th richest person, worth $85.5 billion, and the second-wealthiest in India, according to the Bloomberg Billionaires Index.
Prosecuting the case would take months, if not years, meaning that it will fall to the incoming Trump administration’s Justice Department to determine how to proceed. Peace, the Brooklyn US attorney who was appointed during the Biden administration, is expected to step down and be replaced by whomever Donald Trump picks to lead the office, which is known as EDNY.
Neither a White House press official nor a representative for the Trump transition team immediately responded to emailed requests seeking comment.
Adani celebrated Trump’s election win by describing the president-elect as “the embodiment of unbreakable tenacity, unshakeable grit, relentless determination and the courage to stay true to his beliefs.” Last week he again posted his congratulations on X, committing to invest $10 billion in the US and create as many as 10,000 jobs.
Although the US and India have an extradition treaty, it’s likely that India would fight to protect its citizens from being forced to stand trial in the US. If convicted the defendants could face years behind bars, prosecutors said on Wednesday.
Units of Adani Group scrapped a $600 million dollar bond on Thursday after the charges were made public. The Indian conglomerate decided not to proceed with the offering because of the announcements by US authorities, a person familiar with the matter said, asking not to be identified. The group’s existing US-currency notes plunged in Asian trading.
The leader of India’s opposition Congress party, Jairam Ramesh, called on X for a parliamentary committee investigation after the charges were announced.
“The charges against the Adani executives are very serious indeed,” said Shriram Subramanian, founder and managing director at corporate governance advisory firm Ingovern Research Services. Indian regulators need to pursue investigations more vigorously and speedily, he said.
India’s markets regulator has also been probing Adani Group on the allegations made by the short seller last year. The investigation is ongoing. The regulator has issued several show cause notices to the group on dislosure of shareholdings and related party transactions.
Prosecutors on Wednesday charged four of the eight defendants with conspiring to obstruct justice by deleting electronic evidence and lying to representatives of the Justice Department, Securities and Exchange Commission and FBI.
The SEC, which is a civil law enforcement agency, provided detailed allegations against both Adanis and another one of the co-defendants, Cyril Sebastien Dominique Cabanes, in a parallel lawsuit. The regulator identified the firm involved in the alleged bribery scheme, which wasn’t named in the indictment, as Adani Green Energy Ltd.
According to the regulator, Gautam Adani spearheaded an effort to pay or promise hundreds of millions of dollars in bribes to Indian state government officials to induce them to enter contracts that Adani Green needed to develop India’s largest solar power plant project. Another company involved in the power plant project, Azure Power Global Ltd., agreed to pay some of the bribes, the SEC alleged.
In its lawsuit, the SEC said Cabanes served as a director on the board at Azure Power Global and as a representative of the company’s largest stockholder, pension fund company Caisse de Depot et Placement du Quebec, which is known as CDPQ. While serving as a director, Cabanes, and others, “schemed” to make payments to bribe state government officials in India, the SEC said in its lawsuit.
A lawyer listed by the SEC as representing Cabanes didn’t immediately respond to a request for comment. A representative for Azure Power Global didn’t immediately respond to a request for comment outside of normal business hours.
“CDPQ is aware of charges filed in the US against certain former employees,” a spokesperson for the pension manager said by email. “Those employees were all terminated in 2023 and CDPQ is cooperating with US authorities.”
US authorities ramped up an existing probe into Adani Group by looking into the conduct of the company’s billionaire founder, Bloomberg reported in March. Officials were focused on whether there were improper payments made to officials in India for favorable treatment on an energy project.
(By Patricia Hurtado and David Voreacos)
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