Business
Adani’s US Indictment Case, The Fight Back Begins With Top-Notch US Law Firms. With Hindenburg’s Fall, Was Adani An Easy Target?
On November 21, Gautam Adani and others found themselves in the spotlight as US authorities indicted them over alleged bribes exceeding $250 million. The accusations claim the payments were made to Indian government officials to help Adani Green Energy Ltd (AGEL) secure solar energy contracts from the Solar Energy Corporation of India (SECI).
But the Adani Group isn’t sitting quietly. They’ve hit back by roping in two of the biggest names in global litigation: Kirkland & Ellis and Quinn Emanuel Urquhart & Sullivan LLP. These legal powerhouses, known for tackling high-stakes disputes, are stepping in to defend Adani amid civil and criminal cases filed by the US Securities and Exchange Commission (SEC) and the Eastern District of New York.
The Case So Far
In November, AGEL clarified that Gautam Adani, his nephew Sagar Adani, and senior executive Vineet S Jaain weren’t charged with violating the US Foreign Corrupt Practices Act (FCPA) or bribery. Instead, the spotlight is on former Azure Power executives Ranjit Gupta and Rupesh Agarwal, who face conspiracy charges under the FCPA for allegedly bribing Indian officials to secure government contracts.
Adding to the mix, Cyril Cabanes, Saurabh Agarwal, and Deepak Malhotra—connected with Canadian investor CDPQ—are accused of obstructing justice by tampering with evidence and withholding key information during investigations.
While civil and criminal cases against Adani and others are being consolidated under a single US court judge, the Adani Group’s legal team is gearing up for what could be a long and arduous battle.
Meet the Legal Dream Team
Quinn Emanuel Urquhart & Sullivan LLP – This Los Angeles-based litigation giant has made a name for itself by winning over $70 billion in judgments and settlements, with an 88% success rate in 2,300+ trials. Their expertise spans securities litigation, white-collar defense, intellectual property, and regulatory investigations. Having represented tech titans like Google, Apple, and Uber, Quinn Emanuel knows its way around high-profile cases.
Kirkland & Ellis – With headquarters in Chicago and a presence in 21 cities globally, Kirkland & Ellis is a go-to for complex commercial litigation and government disputes. Their impressive client roster includes Apple, Google, and Facebook, along with companies like Johnson & Johnson and Volkswagen. Their track record in handling environmental and product liability cases adds to their formidable reputation.
Adani Group, led by Gautam Adani, is one conglomerate that continues to intrigue the global business community. From accusations of financial fraud to claims of stock manipulation, the conglomerate has faced relentless scrutiny. But is Adani a soft target, or is there more to the story?
The Hindenburg Effect
In early 2023, just days before the Adani Group’s Rs. 20,000 crore Follow-on Public Offer (FPO), US-based research firm Hindenburg Research released a damning report titled Adani Group: How the World’s 3rd Richest Man Is Pulling the Largest Con in Corporate History. The report alleged financial irregularities and stock manipulation within the group.
The timing and dramatic tone of the report raised eyebrows, but what followed was unprecedented. Adani, prioritizing investor confidence, took the bold step of refunding the entire FPO subscription. This move, while safeguarding retail investors, led to a significant drop in Adani Group’s stock prices, causing massive losses to the promoters, institutional investors, and mutual funds holding significant stakes in the group.
The Gains of Hindenburg
Hindenburg Research, which had taken short positions on Adani stocks, reportedly earned over USD 4 million from its short-selling strategy. Market regulator SEBI later uncovered that Kingdon Capital Management, a New York-based hedge fund, had access to the report months before its release, sharing 30% of its profits with Hindenburg.
This scenario is akin to someone spreading rumors about your property to drive down its price, only to profit from the ensuing distress sale. While the financial gains of USD 4 million might not be groundbreaking in global markets, the timing and motives behind the report remain a subject of speculation.
Resilience….
Adani’s recovery post-Hindenburg was swift, aided by an infusion of Rs. 15,446 crore from GQG Partners in March 2023. This investment gave support to four key Adani Group companies: Adani Ports, Adani Green Energy, Adani Enterprises, and Adani Transmission.
However, adversity struck again in November 2024, when the US Department of Justice (DoJ) accused Adani Green Energy Limited (AGEL) of bribery and corruption, coinciding with a USD 600 million bond issue launch. The allegations forced AGEL to withdraw the bond issue, causing another nosedive in its stock value and the cancellation of key projects by the Kenyan government.
Despite these challenges, Gautam Adani’s response was one of steadfast resilience, emphasizing that “every attack makes him stronger.”
The Journey….
Adani’s rise from a diamond sorter in Mumbai to a global business tycoon does say something powerful about his vision and entrepreneurial spirit. Starting with the import of polyvinyl chloride (PVC) in the late 1980s, he expanded into power generation, renewable energy, and beyond. Today, the Adani Group operates across diverse sectors, including airports, roads, metro rail, mining, data centers, defense, and green energy.
Key projects like the Mundra port, India’s largest commercial port, and the Vizhinjam deepwater transshipment port showcases the group’s ability to execute large-scale infrastructure projects. Adani Airports now manages major airports in cities like Mumbai, Ahmedabad, and Jaipur, marking its critical role in India’s infrastructure development.
- Adani’s focus on sustainability is evident in its ventures:
- A USD 9 billion green hydrogen facility in Gujarat.
- The world’s largest solar and wind power plant under AGEL.
- Coal-based supercritical thermal power projects reducing greenhouse emissions.
- Adani Ports ranked among the top 10 global transportation infrastructure companies for sustainability.
- Renewable energy-powered data centers across India.
These projects align with India’s push towards renewable energy and self-reliance and Adani Group has played a critical role in this direction. The group’s close alignment with India’s infrastructure development has made it a frequent target of criticism. Questions about the source of funding for its capital-intensive projects and the awarding of government contracts has often fuel skepticism.
However, Adani’s cash reserves of Rs. 53,024 crore as of November 2024 and its ability to raise institutional debt illustrate its financial stability. Moreover, the group’s investments span across 25 Indian states governed by diverse political parties, has somewhat challenged the notion of political favoritism. Adani himself has stated, “We are ready to work with any government, as far as they are not doing any politics.”
While critics may question his methods, the group’s contributions to India’s infrastructure and sustainability goals are undeniable. If homegrown conglomerates like Adani do not take up large-scale projects, the void could be filled by foreign players, impacting India’s self-reliance.
