Adani $265 Million Bribery Scandal Comes Under Spotlight Again. US SEC Seeks India’s Help, Stocks Trade Mixed—Modi’s Dilemma, Protect Or Distance?

Just when it seemed like the storm around the alleged $265 million bribery scandal involving Gautam Adani and his nephew Sagar Adani had settled, the US Securities and Exchange Commission (SEC) has reignited the controversy. The regulator has now sought assistance from India’s Ministry of Law and Justice to move forward with its investigation. Clearly, this isn’t going away anytime soon.

The SEC has informed a New York district court that it is actively trying to serve its complaint to Gautam Adani and Sagar Adani, both of whom are based in India. To make this happen, the agency is relying on the Hague Service Convention, a legal framework for serving judicial documents across borders.

Now, here’s where it gets interesting—the SEC has pointed out that under the Federal Rules of Civil Procedure (FRCP), there’s no fixed deadline for serving legal documents in foreign countries. That means the process could drag on, but the SEC is determined to keep the pressure on and will update the court as things unfold.

Flashback to last year—federal prosecutors in Brooklyn had already unsealed an indictment accusing the Adani Group of bribing Indian officials to secure power purchase agreements for Adani Green Energy. The allegations also claim that the conglomerate misled US investors by presenting a rosy picture of its anti-corruption policies.

Of course, Adani Group has categorically denied all accusations, calling them “baseless” and promising to explore “all possible legal recourse.”

What is the bribery case?

The Securities and Exchange Commission (SEC) has accused Gautam Adani, Sagar Adani, and six others of paying $265 million in bribes to Indian state officials between 2020 and 2024. The alleged goal? Securing lucrative solar power contracts expected to generate $2 billion in profits over two decades.

According to legal documents, Adani and his associates have 21 days from the time of receiving the summons to respond to the SEC’s complaint. If they fail to do so, a default judgment could be passed against them.

The SEC also alleges that Adani Green Energy Ltd misled investors—especially those in the US—by falsely claiming it had strong anti-bribery and corporate governance measures in place. However, according to the SEC, none of these claims were true.

The US Department of Justice (DoJ) has further accused the company of hiding ongoing bribery allegations while raising funds from American investors, violating the US Securities Act.

Interestingly, Prime Minister Narendra Modi has distanced himself from the case, saying he never discussed the Adani issue with US President Donald Trump during a Washington visit. Meanwhile, India’s opposition Congress party has ramped up calls for Adani’s arrest, accusing Modi of shielding him. Both Modi’s party and Adani Group have denied these accusations.

Adani Group Stocks Trade Mixed

Meanwhile, Adani Group stocks had a choppy trading session following the latest developments in the bribery case.

—-Adani Green Energy fell 1.9% to Rs 881—taking the biggest hit among group companies.

—Adani Enterprises slipped 0.4% to Rs 2,211.

—Adani Ports was down 0.2% to Rs 1,083.

—Adani Energy Solutions gained 0.5% to Rs 680.

—Adani Total Gas rose 0.4% to Rs 582.

—Adani Power edged up 0.3% to Rs 486.

This isn’t the first time Adani stocks have felt the heat. In November 2024, when the bribery allegations first surfaced, the group’s shares and bonds nosedived, marking their worst decline since the infamous 2023 Hindenburg Research report. However, the stocks bounced back soon after, aided by aggressive debt reduction measures and fresh fundraising efforts.

Adani Energy Solutions and Adani Enterprises raised $1.5 billion in 2024 through share sales and QIP, and more fundraising is planned through dollar bonds in 2025. Whether these financial maneuvers can keep investor confidence afloat amid legal scrutiny remains to be seen.

For now, it’s a wait-and-watch game as the SEC’s pursuit of legal action continues and market reactions unfold accordingly.

Modi’s Dilemma, Protect or Distance?

The latest developments in the Adani bribery scandal have put the Modi government in a tight spot—yet again. For years, the opposition has accused Modi of shielding his close corporate allies, particularly Adani and Ambani, from scrutiny. Now, with the U.S. Securities and Exchange Commission (SEC) actively seeking India’s help in its probe, the government can no longer dismiss the issue as just another political attack.

The Modi government is caught between a rock and a hard place. If it cooperates fully with the SEC and allows a thorough investigation, it risks exposing Adani to significant legal consequences, which could impact investor confidence and dent India’s global image. On the other hand, if it appears to be dragging its feet or shielding Adani, it will only add fuel to the fire, strengthening the opposition’s claims of crony capitalism.

The timing is also critical. With the state elections approaching, Modi cannot afford a major corruption scandal involving a businessman widely seen as his close ally. The opposition, particularly the Congress, has already seized the opportunity to demand Adani’s arrest, making this a high-stakes political issue.

What Happens to Adani?

For Adani, this could go multiple ways –

– If the SEC proceeds aggressively and India cooperates, Adani Group could face significant legal challenges, not just in the U.S. but possibly in India as well. It could impact the group’s fundraising efforts and investor sentiment.

– Adani stocks have already reacted to the news, trading mixed. If the case escalates further, another sharp sell-off could follow, similar to the Hindenburg episode. The company’s debt refinancing plans might also take a hit.

– With U.S. regulators involved, this isn’t just a domestic issue anymore. International investors and rating agencies will be watching closely. If the case gains traction, Adani’s ability to raise funds through international markets could be severely affected.

– If Modi’s government comes under too much pressure, it might be forced to distance itself from Adani, at least publicly. This could mean regulatory agencies in India stepping up scrutiny on the group to show that the government isn’t playing favorites.

The Last Bit, Can Adani Ride This Out?

Despite these challenges, Adani has been in similar situations before. The group has a history of emerging crises through aggressive PR, legal maneuvers, and strong financial backing. However, this time, the involvement of U.S. authorities that might not be as easy to manage.

So, what’s next? If the SEC successfully serves the complaint in India, things could get tricky for Adani. Legal battles on foreign soil aren’t just a PR nightmare; they can impact investor confidence and, ultimately, stock performance. On the other hand, if the legal back-and-forth continues without any concrete outcome, markets might just brush this off as another regulatory speed bump.

For Modi, the question is – does he let Adani take the fall, or does he risk further tarnishing his government’s image by being seen as his protector? Either way, this scandal isn’t going away anytime soon.

Meanwhile, Adani Group stocks are showing a mixed reaction to the latest developments. Investors are clearly trying to gauge whether this case will escalate further or eventually fizzle out.

For now, all eyes are on how India responds to the SEC’s request of the Adani bribery scandal. Will Indian authorities cooperate? Will Adani Group be forced into damage control yet again?