In late 2024, the SEC and DOJ brought enforcement actions against various individuals associated with Adani Group and Azure Power in connection with an alleged Indian bribery scheme.
Both the SEC and DOJ enforcement actions included a Foreign Corrupt Practices Act component (see here and here), but not as to Gautam Adani (a citizen of India and founder of the Adani Group which includes numerous portfolio companies including Adani Green Energy – and Indian energy company) and Sagar Adani (a citizen of India and Gautam Adani’s nephew and Executive Director of Adani Green’s Board of Directors) perhaps due to jurisdiction issues.
Nevertheless, Gautam Adani and Sagar Adani were civilly charged with securities fraud in connection with the same core conduct.
As alleged in the SEC civil complaint:
“In 2021, two senior executives of Adani Green Energy Ltd. (“Adani Green”)— Gautam Adani, Adani Green’s founder and controlling shareholder, and Sagar Adani, Adani Green’s Executive Director (collectively, “Defendants”)—engaged in a bribery scheme involving the equivalent of hundreds of millions of dollars to obtain contracts that benefitted Adani Green, while, at the same time, falsely touting the company’s compliance with antibribery principles and laws in connection with a $750 million bond offering (the “Offering”).
Gautam Adani founded Adani Green and Defendants are part of a four-person management team that controls it. For years, Defendants positioned Adani Green to investors and the public as a leader among its peers and within India in principles of good corporate governance, highlighting Adani Green’s purportedly rigorous anti-bribery and anti-corruption principles and policies, and seeking to appeal to investors who valued governance factors.
In September 2021, Defendants leveraged that narrative in the Offering to sell $750 million of Adani Green corporate bonds (“Notes”), including more than $175 million in Notes to investors in the United States.
In connection with the Offering, Adani Green told purchasers of the Notes that none of Adani Green’s directors or officers, including Defendants themselves, had paid or promised to pay bribes to government officials or attempted to unduly influence those officials. Adani Green and Defendants also emphasized to underwriters and potential investors that Adani Green had implemented robust anti-bribery and anti-corruption processes and that Adani Green was a leader in India in good corporate governance.
None of this was true. In the months and weeks before making these representations in connection with the Offering, Defendants were personally involved in paying or promising the equivalent of hundreds of millions of dollars in bribes to Indian state government officials to induce Indian state governments to enter into contracts necessary for Adani Green to develop India’s largest solar power plant project, from which Adani Green stood to earn billions of dollars.
A second company involved in that power plant project, Azure Global Power Limited (“Azure”), agreed to pay a portion of those bribes and Defendants were also personally involved in collecting payment from Azure.
Gautam Adani and Sagar Adani lied to purchasers of Adani Green’s Notes about Adani Green’s and their own involvement in a complex and high value bribery scheme. Those lies, made in connection with the offer and sale of Notes to investors in the United States, violated the antifraud provisions of the federal securities laws.”
Last week, the SEC announced:
“Without admitting or denying the allegations in the complaint, Gautam Adani and Sagar Adani each consented to the entry of final judgments, subject to court approval, that would permanently enjoin each from violating [various securities law provisions]. In addition, the final judgments, if approved by the court, would order Gautam Adani and Sagar Adani to pay civil monetary penalties of $6,000,000 and $12,000,000, respectively.”
In connection with the same core conduct Gautam Adani and Sagar Adani were also criminally charged with securities fraud conspiracy and wire fraud conspiracy.
Today, the DOJ filed a consent motion to dismiss the case, not just against the Adanis but other defendants as well.
The motion states;
“The government respectfully submits this motion, pursuant to Federal Rule of Criminal Procedure 48(a), requesting that the Court dismiss the indictment in this case with prejudice. The Department of Justice has reviewed this case and has decided, in its prosecutorial discretion, not to devote further resources to these criminal charges against individual defendants. See United States v. Blaszczak, 56 F.4th 230, 238-42 (2d Cir. 2022) (“The government may elect to eschew or discontinue prosecutions for any of a number of reasons. Rarely will the judiciary overrule the Executive Branch’s exercise of these prosecutorial decisions.”). No defendant has appeared. Counsel for all defendants consent to this relief.”
