THE business Gautam Adani’s empire is in turmoil again after the Indian billionaire tycoon was accused in the United States of paying exorbitant bribes to secure lucrative government contracts.

Who is Gautam Adani?

Adani, 62, is a publicity-shy school dropout from humble beginnings who became fabulously wealthy.

Having moved to Mumbai as a teenager to work in diamond sorting, he started his own import-export business.

Its big turning point came in 1995, when it acquired a seaport, just as the Indian economy was opening up.

Today, the Adani Group has interests in everything from Australian power generation and coal mining to Israeli cement, media, food, airport terminals and ports.

The meteoric rise in share prices of Adani units – flagship Adani Enterprises rose more than 1,000 per cent in five years – helped make the conglomerate incredibly wealthy and finance further expansion.

What is its relationship with the government?

Read also

Gautam Adani: Indian billionaire tycoon accused of corruption in the United States

Adani is considered a close ally of Prime Minister Narendra Modi, who hails from Gujarat.

The tycoon’s conglomerate offered Modi the use of a private airline plane during the 2014 election campaign that brought his Hindu nationalist Bharatiya Janata Party (BJP) to power.

Two years ago, Adani made a hostile takeover bid for NDTV, a television news service seen as one of the few media outlets willing to openly criticize Modi.

Adani allayed press freedom fears but told the Financial Times that journalists should have the “courage” to speak out “when the government is doing the right thing every day”.

Critics, including Indian opposition leader Rahul Gandhi, have accused Adani of improperly taking advantage of its relationship with Modi to win business and avoid proper oversight – allegations that the Adani Group and its founder have always denied.

Why was he charged?

Wednesday’s indictment in New York accuses Adani Group executives of paying more than $250 million to Indian government officials to secure lucrative contracts worth more than $2 billion.

Read also

Ruto and Raila criticized for defending Adani Group as president Gautam faces fraud charges: ‘They don’t listen’

It further accuses Adani and seven other officials of lying about corruption in order to raise capital from international investors, including American ones.

“These crimes were allegedly committed by senior executives and directors to obtain and finance massive government energy contracts through bribery and fraud at the expense of American investors,” said Deputy Assistant Attorney General of the United States, Lisa Miller, in a press release.

The indictment accuses Adani of personally meeting with an Indian government official to “advance” the bribery scheme, and of meeting with other defendants to “discuss aspects of its execution.”

What is the reaction in India?

The Adani group admitted Thursday to the accusations against its founder and several others by canceling a sale of American bonds that it had initiated just hours before the publication of the indictment.

But he did not comment otherwise on the allegations against the tycoon or his subordinates, none of whom have been taken into custody.

Read also

India’s Adani Enterprises goes bankrupt after founder’s US accusations

Modi’s government also did not comment, but BJP spokesperson Amit Malviya said in a statement on social media platform opposition rather than that of the Prime Minister.

Jairam Ramesh of India’s main opposition Congress party said the indictment “vindicates” his demand for a parliamentary inquiry into Adani.

He added that the indictment demonstrated what he called the “abject failure” of the Securities and Exchange Board of India (SEBI) to properly investigate the Adani group in the past.

Has the Adani Group ever faced scrutiny?

Last year, Hindenburg Research – an activist US investment group that bets on stocks falling – accused the Adani Group of committing “brazen stock manipulation and accounting fraud over decades”.

This involved funneling money from offshore accounts controlled by Adani’s brother Vinod Adani to listed units in order to inflate their share prices.

The Hindenburg report triggered a massive sell-off of shares in Adani’s companies, wiping out more than $150 billion in market value in the following weeks.

Read also

Trump nominates China hawk Howard Lutnick as US Commerce Secretary

Adani’s CFO dismissed the report, calling it a “malicious combination of selective misinformation and outdated, baseless and discredited allegations that have been tested and rejected by India’s highest courts.”

Source: AFP