US prosecutors are expanding their investigation into Adani Group, focusing on potential bribery by the company and the actions of its billionaire founder, according to individuals familiar with the situation.

Investigators are examining whether an Adani entity or individuals associated with the company, including Gautam Adani, may have provided payments to officials in India in exchange for favourable treatment on an energy project, according to sources familiar with the inquiry who requested anonymity due to the sensitive nature of the investigation.

The probe, which also involves Indian renewable energy firm Azure Power Global Ltd., is being overseen by the US Attorney’s Office for the Eastern District of New York and the Justice Department’s fraud unit in Washington, as per individuals familiar with the situation.

The Adani Group stated in an emailed response that they are not aware of any investigation involving their chairman. They asserted their commitment to conducting business with the utmost standards of governance and compliance with anti-corruption and anti-bribery laws in India and other jurisdictions.

Representatives for the Justice Department in Brooklyn and Washington refrained from providing comments. Requests for comment from Azure went unanswered. Gautam Adani, his company, and Azure have not faced any charges of wrongdoing by the Justice Department. It is important to note that investigations do not always result in prosecutions.

Besides its significant presence within India, encompassing ports, airports, power lines, and highway developments, the Adani Group also garners capital from various parts of the world. US law permits federal prosecutors to investigate foreign corruption allegations if they are connected to American investors or markets in specific ways.

Adani's extensive business empire faced turmoil in early last year following allegations by short-seller Hindenburg Research that the conglomerate manipulated its stock price and engaged in accounting fraud. The group vehemently refuted these accusations, and its shares have largely recovered from their initial decline.

Following a report by Bloomberg News last year, the Justice Department and the Securities and Exchange Commission began investigating claims made against Adani. The probe is now at an advanced stage, although the DOJ may choose to continue its investigations without informing the parties involved.

Adani Group and Azure, both operating in India's green-energy sector, have competed for contracts under the same state-run solar program. Additionally, Azure faced whistleblower complaints regarding illicit payments and was delisted from the New York Stock Exchange last year due to delayed filings.

Azure faced fallout from whistleblower complaints and was delisted from the New York Stock Exchange due to delayed filings last year. The company acknowledged cooperating with the Justice Department and SEC following an internal investigation, which revealed evidence suggesting involvement in an "apparent scheme" related to certain projects by individuals previously associated with the firm.

The Foreign Corrupt Practices Act prohibits offering bribes to foreign officials for favourable treatment, applying to entities with US connections like public listings or American investors. Prosecutors in Brooklyn have a track record of aggressively pursuing such cases.

Although the Adani Group isn't traded in the US, it has American investors. FCPA investigations, which can last for years, often result in significant fines for companies. While prosecutions of company executives under FCPA are rare, they attract considerable attention when they occur.

Image source: The Economic Times