The Adani Group, one of India’s largest conglomerates, has agreed to pay $18m to settle a US Securities and Exchange Commission (SEC) investigation into alleged fraud. The settlement, announced late on Monday, resolves claims that the company misled investors about its financial practices and business dealings. The SEC had accused Adani entities of violating anti-fraud provisions, though the group neither admitted nor denied the allegations in agreeing to the penalty.
The case, which centred on disclosures related to a $2bn bond issuance in 2021, is the first major legal settlement for the group since a damaging report by short-seller Hindenburg Research in January 2023. That report had alleged widespread corporate malfeasance, triggering a sharp decline in Adani shares and prompting regulatory scrutiny in multiple jurisdictions. The SEC investigation focused specifically on whether the company had made false statements about its use of offshore funds and related party transactions.
The development has reignited concerns about governance standards in Indian corporate houses, particularly those with close ties to the government of Prime Minister Narendra Modi. The Adani Group, led by billionaire Gautam Adani, has previously denied any wrongdoing. The settlement amount, while modest relative to the group’s market capitalisation, is seen as a significant reputational blow.
In London, the UK government has issued a formal statement calling for greater transparency in Indian business ties, particularly in sectors with strategic implications such as infrastructure, energy and defence. Officials stressed that the UK’s deepening economic partnership with India must be underpinned by robust corporate governance and accountability. The statement, from the Foreign, Commonwealth and Development Office, pointedly noted that “investors and the public alike require confidence that legal and regulatory frameworks are enforced consistently.”
The UK’s demand underscores a growing unease among Western allies about the opaque nature of some Indian corporate empires. While India’s economy has expanded rapidly under Modi, with significant foreign direct investment inflows, concerns remain about the rule of law and the independence of regulatory bodies. The Adani case has become a test case for how such issues are managed in a country that aspires to be a global manufacturing and technology hub.
Analysts caution that the settlement does not necessarily mark an end to Adani’s legal troubles. The US Department of Justice is believed to have its own parallel inquiry, and the group faces ongoing litigation in Indian courts. The Hindenburg report also prompted investigations by India’s Securities and Exchange Board, the outcome of which remains pending.
The broader implications for India’s business environment are significant. If the US and UK continue to apply pressure, it could complicate Modi’s efforts to position India as a reliable alternative to China. However, the Indian government has pushed back against external criticism, arguing that its regulatory systems are robust and that foreign entities should respect domestic legal processes.
For Gautam Adani, whose net worth has fluctuated wildly since the Hindenburg report, the settlement represents a managed retreat rather than a full capitulation. But the UK’s intervention suggests that the affair is far from closed. As international scrutiny intensifies, the Adani Group may be forced to adopt more transparent practices, potentially reshaping the way Indian conglomerates operate on the global stage.
