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U.S. prosecutors have indicted one of India's richest men in a multimillion-dollar bribery scheme involving a solar power project. The case involves a massive conglomerate, government kickbacks and American investors. NPR's Jackie Northam reports.
JACKIE NORTHAM, BYLINE: Sixty-two-year-old Gautam Adani is the founder and chairman of the Adani Group, a vast business empire in India.
MILAN VAISHNAV: He is a billionaire who presides over a conglomerate, whose interests span everything from cement to airports to highways to digital tech.
NORTHAM: Milan Vaishnav is director of the South Asia Program at the Carnegie Endowment for International Peace. He says Adani has deep ties to India's government.
VAISHNAV: Adani is what's known as a national champion. This is a firm that is seen as close to the powers that be that as a result of that proximity is one of the most important firms working in India.
NORTHAM: But on Thursday, U.S. prosecutors indicted Adani and several other executives, alleging they attempted to pay more than $250 million worth of bribes to Indian officials to secure favorable terms on solar power contracts. The 54-page criminal indictment also alleges the Adani Group was involved in these kickback schemes at the same time it was raising funds for the solar energy project from U.S. investors. Vaishnav says the U.S. prosecutors used a powerful law known as the Foreign Corrupt Practices Act.
VAISHNAV: Which makes it illegal for any company that does business in the United States to give or take bribes abroad.
NORTHAM: The Adani Group says the allegations are baseless, but the indictment had an immediate effect. Share prices fell about 20%, roughly $30 billion, on Thursday but have clawed back some of that since. There could be political blowback as well. Adani has a close relationship with Prime Minister Narendra Modi. Michael Kugelman, director of the South Asia Institute at the Wilson Center says Modi needs to be careful.
MICHAEL KUGELMAN: Incompatibility is a very big part of his political mystique, but he has this friendship with Adani, which I don't think he would want to jeopardize given how significant a player Adani is.
NORTHAM: Kugelman says Modi has courted U.S. CEOs over the years and, despite the allegations against Adani, will continue to send a clear message that India wants and welcomes U.S. investment. Kugelman says it's unlikely the indictment will dent American investment interest in India.
KUGELMAN: You know, we're talking about a country that is, at the end of the day, the fastest-growing major economy in the world - one of the top economies overall in the world, and so it's a very attractive investment destination. That's not going to change.
NORTHAM: Adani survived another major and expensive scandal less than two years ago when a boutique New York investment firm, Hindenburg Research, accused the Indian conglomerate of stock manipulation and corporate fraud. But analysts believe Thursday's indictment by U.S. federal prosecutors, as well as a civil suit filed by the Security and Exchange Commission, could mean a harder comeback this time for the Adani empire.
Jackie Northam, NPR News.
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