SEC and DOJ Charge Adani for Massive Bribery Scheme in India
On November 20th, the U.S. Securities and Exchange Commission (SEC) and Department of Justice (DOJ) made some significant announcements. They revealed charges against Indian billionaire Gautam Adani, his nephew Sagar Adani, business associate Cyril Cabanes, and other senior business executives in connection with an alleged $250 million bribery scheme in India.
The U.S. authorities claim that Adani and his business associates devised this bribery scheme to benefit their renewable energy companies, Adani Green Energy, and Azure Power Global. These companies were looking to take advantage of a multi-billion-dollar solar energy project awarded to them by the Indian government. During a note offering by Adani Green that raised $750 million, including around $175 million from U.S. investors, false or misleading statements regarding anti-corruption and anti-bribery efforts were supposedly included.
Cabanes, along with former employees Saurabh Agarwal and Deepak Malhotra, allegedly violated the Foreign Corrupt Practices Act (FCPA) by facilitating the authorization of the hundreds of millions of dollars in bribes paid to Indian government officials. These bribes were meant to secure the officials’ commitment to buying energy at above-market rates that would benefit Adani Green and Azure Power.
According to Sanjay Wadhwa from the SEC’s Division of Enforcement, the Adanis misrepresented information about their anti-bribery compliance program to entice U.S. investors during the note offering for Adani Green Bonds. Meanwhile, Cyril Cabanes was allegedly involved in the bribery scheme while serving as the director of a U.S. public company.
Deputy Assistant Attorney General Miller stated that the offenses committed by senior executives and directors, allegedly involving massive bribes, lying to investors, and obstructing justice, were done to obtain and finance state energy supply contracts through corruption and fraud, impacting U.S. investors.
The SEC Whistleblower Program, established by the Dodd-Frank Act, extends provisions to the FCPA. Whistleblowers who report original information leading to successful enforcement actions may receive monetary awards of 10-30% of collected funds through this program. The DOJ recently introduced its whistleblower award program, covering FCPA cases not under the SEC program. While discretionary, these awards highlight a significant development in encouraging whistleblowers to come forward with pertinent information.
As the investigation and legal process unfolds, these charges against the Adani Group’s executives underscore the importance of transparency and anti-corruption efforts in the global business landscape. The SEC and DOJ’s actions exemplify the commitment to holding individuals accountable for violating securities laws and conducting corrupt practices.
