Mumbai: Adani Green Energy Thursday said the company has postponed the proposed USD-denominated bond offerings against the backdrop of US prosecutors charging the Adani Group Chairman Gautam Adani and other Indian executives with an alleged bribery scheme.
In a statement on Thursday, Adani Green Energy Limited said: “The United States Department of Justice and the United States Securities and Exchange Commission have issued a criminal indictment and brought a civil complaint, respectively, in the United States District Court for the Eastern District of New York, against our Board members, Gautam Adani and Sagar Adani.".
“The United States Department of Justice have also included our Board member, Vneet Jaain, in such criminal indictment. In light of these developments, our subsidiaries have presently decided not to proceed with the proposed USD denominated bond offerings,” it said.
Adani Green Energy was planning to raise $1.5 billion for financing new green energy projects in the conglomerate’s biggest borrowing since the group came under attack from a US short seller in January.
The company aimed to tap the bond markets and had appointed multiple banks including the State Bank of India, DBS Bank, Emirates NBD Bank PJSC, and First Abu Dhabi Bank PJSC, as joint bookrunners.
What is the bribery charge by the US
US prosecutors on Wednesday charged billionaire Adani with paying hundreds of millions of dollars in bribes and hiding the payments from investors. They alleged that Adani agreed to pay more than $250 million in bribes to Indian officials for lucrative solar energy supply contracts.
The deals were projected to generate more than $2 billion in profits after tax, over roughly 20 years. Prosecutors say one of Adani's alleged accomplices meticulously tracked bribe payments, using his phone to log the bungs offered to officials.
"This indictment alleges schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice," said Deputy Assistant Attorney General Lisa Miller.
"Gautam Adani and seven other business executives allegedly bribed the Indian government to finance lucrative contracts designed to benefit their businesses... while still other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government's investigation," said the FBI's James Dennehy.
Who is Gautam Adani?
Born in Ahmedabad in a middle-class family in 1962, Gautam Adani dropped out of school at 16 and moved to the financial capital Mumbai to find work in the city's lucrative gem trade. After a short stint in his brother's plastics business, he launched the flagship family conglomerate that bears his name in 1988 by branching out into the export trade.
His big break came seven years later with a contract to build and operate a commercial shipping port in Gujarat. Adani Group's rapid expansion into capital-intensive businesses previously raised alarms, with Fitch subsidiary and market researcher CreditSights warning in 2022 it was "deeply over-leveraged."
In 2023 a bombshell report from US investment firm Hindenburg Research claimed the conglomerate had engaged in a "brazen stock manipulation and accounting fraud scheme over the course of decades."
Hindenburg said a pattern of "government leniency towards the group" stretching back decades had left investors, journalists, citizens and politicians unwilling to challenge its conduct "for fear of reprisal." (With Agency inputs)
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