After US SEC summons, fresh plea in SC seeks probe in indictment of Gautam Adani

Even as Gautam Adani, chairman of the Adani Group, and Sagar Adani, an executive director at Adani Green Energy Ltd., have been summoned by the US Securities and Exchange Commission (SEC) in a bribery case, in a new twist, a fresh plea has been filed in the Supreme Court in India seeking a probe into the US indictment of the billionaire industrialist.

The plea, filed by advocate Vishal Tiwari, seeks a probe into the indictment of Gautam Adani who has been charged in the US for alleged bribery and fraud, saying the move "unveiled malpractices carried out by the conglomerate". Incidentally, the plea is an interlocutory application in the batch of pleas in the Adani-Hindenburg row over allegations of stock price manipulation by the Indian corporate giant.

Serious charges

The US Department of Justice has accused Adani of being part of an elaborate scheme to pay US$ 265 million (about ₹2,200 crore) bribe to Indian officials in exchange for favourable terms for solar power contracts in four Indian states.

According to the US indictment, Adani misled US investors with falsified documents and concealed transactions while raising funds over several years. The scheme allegedly involved more than $2 billion raised through loans and bonds, some of which were from American financial institutions, all built on false claims related to anti-bribery practices and reports of an ongoing bribery probe.

Adani Group has denied the charge, saying the allegations levelled by the US prosecutors are "baseless" and that the conglomerate is compliant with all laws. It also vowed to pursue all possible legal recourse.

SEBI to clear the air

In his plea before the apex court, Tiwari contended that the allegations against Adani are of "serious nature" and should be investigated by the Indian authorities.

Further, the plea said, "The SEBI has to inspire confidence by concluding the investigations and placing on record the report and conclusion of the probes. As there were allegations of short selling in the SEBI investigation and the present allegations levelled by the foreign authorities might have connection or may not have, but SEBI's investigation report should clear this so that the investors may not loose confidence."

US SEC summons

Meanwhile, the US SEC in its summons to Gautam Adani and his nephew Sagar have ordered them to reply to the allegations of paying bribes to secure solar power contracts within 21 days.

The summons, sent through the New York Eastern District Court, warns that if they fail to respond this could result in a default judgment being entered against the accused.

Notably, the SEC charges are separate from those brought by the US Department of Justice, but they both are connected to the same massive bribery scheme involving corrupt practices and misleading financial statements.

The SEC basically claims that Adani executives misled investors and financial institutions by providing false information to secure funding for solar projects, all while knowing that some of the capital was linked to corrupt practices.

The SEBI investigation in India

In the plea filed in the SC in India, the petitioner, Vishal Tiwari, requested that the two critical documents—the US court indictment and the SEC’s complaint—be included in an ongoing case, alleging stock manipulation by the Adani Group.

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This request follows a broader investigation by the Securities and Exchange Board of India (SEBI) into allegations of stock manipulation and market irregularities, sparked by the publication of the Hindenburg Report in January 2023. The petition argues that the findings from the US legal documents could serve as critical evidence to strengthen SEBI’s ongoing investigation into the Adani Group’s business activities.

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The short-seller also alleged conflict of interest involving SEBI chairperson Madhabi Puri Buch, claiming she had links to offshore funds connected to the Adani Group. SEBI and Buch have denied these claims, claiming the regulator conducted a thorough probe into the conglomerate’s dealings.

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Widening impact

The charges filed in the US have further fuelled political and regulatory debates in India, with Opposition leaders questioning the Modi government’s stance on the matter. The timing of the US indictment, coupled with the new application in the Supreme Court, has intensified demands for a transparent investigation into the allegations.

Ratings agencies have also weighed in, further complicating matters for Adani.

S&P Global Ratings downgraded the outlook for three of Adani's key companies—Adani Green Energy, Adani Transmission, and Adani Total Gas—from “stable” to “negative.”

Moody’s announced that the latest developments were credit-negative for the Adani Group. These changes signal growing concerns about the group's ability to maintain its financial position in the wake of these scandals, said business reports.

(With inputs from agencies)