India’s Adani says US accusations are ‘baseless’, opposition calls for arrest

India’s Adani Group on Thursday called US allegations that its billionaire tycoon founder Gautam Adani paid more than $250 million in bribes “baseless” as the opposition leader demanded his arrest.

The harsh denial came as shares of the industrialist’s conglomerate fell nearly 20 percent in Mumbai, the morning after a bombshell indictment in New York accused him of deliberately misleading international investors.

Adani is a close ally of Hindu nationalist Prime Minister Narendra Modi and was once the world’s second richest man, and critics have long accused him of unduly benefiting from their relationship.

“The allegations brought by the US Department of Justice and the US Securities and Exchange Commission against the directors of Adani Green are baseless and denied,” the conglomerate said in a statement, adding that “all available legal remedies will be pursued.”

However, Congress Party leader Rahul Gandhi said the businessmen should be taken into custody.

“We demand that Adani be arrested immediately. But we know that will not happen because Modi is protecting him,” Gandhi told reporters in New Delhi.

“Modi cannot act even if he wants to because Adani controls him.”

An indictment unsealed Wednesday accuses Adani and several of his subordinates of paying more than $250 million in bribes to Indian officials for lucrative solar energy contracts.

The deals were expected to generate more than $2 billion in after-tax profits over about 20 years.

None of the defendants named in the case are in custody.

– “They lied” –

Adani and two other board members of his Adani Group “lied about the bribery scheme as they sought to raise capital from U.S. and international investors,” U.S. lawyer Breon Peace said in a statement.

The allegation led to huge losses for Adani Enterprises’ flagship unit and scores of other subsidiaries immediately after the Mumbai stock exchange opened on Thursday.

The conglomerate’s renewable energy subsidiary Adani Green Energy said it had decided to halt the planned bond sale “in light of these developments.”

Gautam’s nephew and board member Sagar Adani, who is also named in the indictment, told AFP in October that there was “no political connection” between the Adani Group and the Modi government.

“Essentially, we create what the government really needs, in its interests,” he added.

“All the projects we received were not awarded through any concession, but through an independent and transparent auction system.”

The Modi government has yet to comment on the charges, but ruling Bharatiya Janata Party (BJP) spokesman Amit Malviya said the indictment appeared to implicate opposition parties and not his own.

“Don’t worry unnecessarily,” Malviya added in her social media post X.

– “Fear of reprisals” –

With a business empire spanning coal, airports, cement and media, the Adani Group has weathered previous allegations of corporate fraud and suffered a similar stock crash last year.

The conglomerate lost $150 billion in market value in 2023 after a shocking report from short-selling firm Hindenburg Research accused it of “brazen” corporate fraud.

It alleged that the Adani Group had been involved in “stock manipulation and accounting fraud” for decades.

The report also said a decades-long pattern of “government leniency toward the group” had left investors, journalists, citizens and politicians reluctant to challenge its behavior “for fear of reprisal.”

Gautam Adani, the founder of the family conglomerate, rejected Hindenburg’s initial allegations and called his report a “deliberate attempt” to damage his image in favor of short sellers.

In the two weeks since the report was published, his net worth has dropped by approximately $60 billion, and Forbes currently ranks him as the 25th richest person in the world.

– “Complete failure” –

Adani Group’s rapid expansion into capital-intensive businesses has also raised alarm bells in the past, with subsidiary Fitch and market researcher CreditSights warning in 2022 that it was “severely overleveraged.”

Jairam Ramesh, spokesman for Gandhi’s Congress party, said on Thursday that the indictment “validates” their demand for a parliamentary inquiry into Adani.

Ramesh condemned what he called the Securities and Exchange Board of India’s (SEBI) “blatant failure” to force the Adani Group to “account for the source of its investments.”

Born into a middle-class family in Ahmedabad, Gujarat, Adani dropped out of school at 16 and moved to the financial capital of Mumbai to find work in the lucrative gem trade.

After a short stint in his brother’s plastics business, he founded the family’s flagship conglomerate that bears his name in 1988, entering the export trade.

Sai-gle-pyzhm/dan