The Adani Group bribery scandal and why Kenya is in frame

The Securities and Exchange Commission (SEC) has charged Gautam Adani and his nephew, Sagar Adani, with bribery and related offences contrary to the US anti-bribery law and the Foreign Corrupt Practices Act (FCPA). 

The SEC alleges that the bribery scheme was aimed at securing a lucrative solar energy project awarded by the Indian government. As part of the scheme, Adani Green Energy, a subsidiary of the group, raised $175 million from U.S. investors during a $750 million note offering in September 2021.

According to SEC officials, the company misrepresented its compliance with anti-bribery laws to attract investors, including assurances that senior executives had not engaged in corrupt practices.

The SEC’s Acting Enforcement Director, Sanjay Wadhwa, emphasised the commitment to holding corporate officers accountable for securities law violations.

“As alleged, Gautam and Sagar Adani induced U.S. investors to buy Adani Green bonds through an offering process that misrepresented not only that Adani Green had a robust anti-bribery compliance program but also that the company’s senior management had not and would not pay or promise to pay bribes, and Cyril Cabanes participated in the underlying bribery scheme while serving as director of a U.S. public company,” said Wadhwa.

Who is Gautam Adani?

Gautam Adani, one of India’s wealthiest individuals, built his empire from humble beginnings. Born in Gujarat, he started in the diamond trade and later expanded into various sectors, including ports, coal, and renewable energy. At its peak in 2022, his net worth reached $127 billion. The Adani Group is now India’s largest private operator of ports and a key player in renewable and thermal energy.

Adani Group's response

The Adani Group has denied the allegations and pledged to defend its reputation through legal means. In a statement, the company insisted that the charges were baseless and reiterated its commitment to governance, transparency, and regulatory compliance.

“The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied. As stated by the US Department of Justice itself, "the charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty." All possible legal recourse will be sought,” the statement read in part.

Adding, “The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency, and regulatory compliance across all jurisdictions of its operations. We assure our stakeholders, partners, and employees that we are a law-abiding organisation, fully compliant with all laws.”

Any financial impact?

The scandal has already caused significant financial repercussions for the Adani Group. The conglomerate lost $27 billion in market value in a single day, and Adani Green Energy cancelled a planned $600 million bond sale. Key subsidiaries, including Adani Ports and Adani Total Gas, saw their stock prices plummet.

Why is Kenya in frame?

The Adani Group’s troubles extend to Kenya, where it has been a major development partner. Two high-profile projects—worth $736 million for power transmission and a contract to modernise Nairobi’s Jomo Kenyatta International Airport—placed the company at the centre of public controversy. The airport deal would have leased the country's main airport to the group for 30 years in exchange for expanding it.

The introduction of these deals and its award to the Adani group erupted anti-Adani protests in Kenya and a strike by airport workers, who said it would consequently lead to degraded working conditions and job losses in some cases. Kenyan civil society groups and labour unions criticised these deals for lacking transparency and risking job losses.

Pursuant to this, a joint action by some civil society groups sought to injunct the government from finalizing the deal with the Adani group, describing the deal as irrational.

However, while denying any form of wrongdoing, President William Ruto has, in a state of the nation address, cancelled the multimillion-dollar airport expansion project and energy deal.

Ruto said his government’s decision was “based on new information provided by our investigative agencies and partner nations.”