The SEC has charged an Indian billionaire and two executives over an alleged $250 million bribery scheme.
Gautum Adani, Sagar Adani and Cyril Cabanes have all been charged over an alleged scheme linked to renewable energy projects in India.
The accusations involve manipulating government contracts and misleading US investors, with far-reaching implications for the companies Adani Green Energy Ltd. and Azure Power Global Ltd.
Gautam Adani is said to be worth $68 billion, making him India’s second richest man.
Allegations Surrounding Adani Green Energy
The SEC asserts the alleged bribes enabled government commitments to purchase solar energy at inflated prices, benefiting both Adani Green and Azure Power.
The misconduct directly contradicted claims of robust anti-bribery policies made in the company’s bond offering materials.
Gautam Adam is the chairman of Adani Green’s board of directors.
Sagar Adani is his nephew and the executive director for the company.
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The allegations
The two are accused of orchestrating bribes worth hundreds of millions of dollars to Indian government officials.
The SEC also says they misrepresented the company’s anti-corruption measures in investor materials and raised $750 million in a 2021 bond offering, including $175 million from US investors.
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SEC Charges Against Azure Power’s Cyril Cabanes
Cyril Cabanes is a former director of Azure Power.
He is accused of facilitating bribe authorizations while operating in the US and abroad.
Cabanes faces violations of the Foreign Corrupt Practices Act (FCPA), including the authorization of payments to government officials. The SEC claims he actively participated in advancing the bribery plot.
Legal Actions and Consequences
The SEC’s complaint against Gautam and Sagar Adani charges them with violating the antifraud provisions of the federal securities laws.
It seeks permanent injunctions, civil penalties, and officer and director bars.
The complaint against Cabanes charges him with violating the FCPA and seeks a permanent injunction, a civil penalty, and an officer and director bar. Both complaints were filed in the US District Court for the Eastern District of New York.
The US Attorney’s Office for the Eastern District of New York also unsealed criminal charges against Gautam and Sagar Adani and Cabanes, among other people connected to Adani Green and Azure Power.
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SEC’s Statement
Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement, said:
“As alleged, Gautam and Sagar Adani induced U.S. investors to buy Adani Green bonds through an offering process that misrepresented not only that Adani Green had a robust anti-bribery compliance program but also that the company’s senior management had not and would not pay or promise to pay bribes, and Cyril Cabanes participated in the underlying bribery scheme while serving as director of a U.S. public company,”
“We will continue to vigorously pursue and hold individuals, including senior corporate officers and directors, accountable when they violate our securities laws.”
Response from the Adani Group
“The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied.
“As stated by the US Department of Justice itself, “the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.” All possible legal recourse will be sought.
“The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations. We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws.”
