[An Indian corporation embroiled in trouble with the US government. Photo Credit to Pixabay]

Gautam Adani, India’s second-wealthiest individual, was indicted by US prosecutors on November 21, 2024, over a $265 million scheme to bribe Indian government officials. 

The case stems from September 2021, when Adani and his nephew Sagar, an executive director at Adani Green Energy, participated in a note offering, a process that offers debt securities to investors with the promise of repayment at a future date. 

The offering raised $750 million, including $175 million from US investors. 

According to the US Department of Justice (DoJ) and the US Securities and Exchange Commission (SEC), Adani, Sagar, and 6 others allegedly used these investments to facilitate a $265 million bribe to Indian officials in exchange for contracts and permission to build India’s largest solar power plant.

These contracts were estimated to generate $2 billion in revenue over the next two decades.

Prosecutors allege that Adani’s actions violated a US law prohibiting foreign companies from raising funds from US investors based on false claims or through bribes.

Investigators believe this is not an isolated incident; they have accused the Adani Group and its former CEO Vneet Jaain of raising up to $3 billion in loans and bonds through these illegal methods.

Adani, Sagar, and Jaain face charges of securities fraud, securities fraud conspiracy, and wire fraud conspiracy.

The US government has indicated that it will hand the warrants to foreign law enforcement.

Legal experts note that the warrants may be ineffective if Adani and Sagar do not appear in American courts, as neither are American citizens and are not required to appear for trial. 

Currently, the accused’s whereabouts are unknown and they are not in custody. 

However, under the terms and conditions of the US-India extradition treaty, the Indian government could extradite the defendants for trial. 

This scenario appears more likely given that many Indian politicians have previously accused Prime Minister Narendra Modi’s government of providing favorable treatment to the Adani group. 

While there have been calls for investigations into corruption and wrongdoing against the corporation, these have been dismissed by both the Adani Group and Modi’s administration. 

Nevertheless, analysts suggest there is a high chance that the pair will not be extradited, as the Indian government has little to gain from sending one of their most affluent families to face prosecution in America.

In response, the Adani group has vehemently denied these allegations and promised further legal action. 

The group has also canceled a $600 million US bond sale in retaliation to these “baseless” accusations.

The impact of the indictment has been immediate.

The Kenyan government has withdrawn from a $2.5 billion deal with the Indian corporation for a new airport.

Adani Group stock shares have plummeted by nearly 20% and the group’s value has slumped by $27 billion.  

Moreover, the corporation’s bonds, shares, market capitalization, and stocks have all decreased.

The confrontation between the US and the Adani Group, one of India’s most prominent corporations with close connections to its ruling politicians, could have implications for  US-India relations.

Despite economic partnerships, the two nations’ relationship is growing increasingly tense. 

In 2019, PM Modi and his Hindu nationalist Bharatiya Janata Party (BJP) passed the Citizenship Amendment Act, which gave non-Muslim immigrants expedited access to citizenship, an action that the US Commission on International Religious Freedom called “a significant downward turn in religious freedom in India.” 

India’s close friendship with US adversaries further deteriorates its relationship with the US. 

India is a member of BRICS (Brazil, Russia, India, China, South Africa), an intergovernmental organization that aims to counteract the West’s increasing influence on the world stage. 

Russia, the US’s primary competitor as global hegemon, recently called India “a true friend” during an emergency meeting with Iranian envoys in May, 2024.  

This recent development could worsen the already sensitive relations, but its full effects will not be apparent until the conflict between the Adani Group and the US government is resolved.