By Nikunj Ohri and Dharamraj Dhutia

NEW DELHI (Reuters) -Indian billionaire Gautam Adani has been indicted by U.S. prosecutors for his alleged role in a $265 million scheme to bribe Indian officials, plunging his conglomerate deep into crisis for the second time in two years.

Multiple counts of fraud – which U.S. authorities say involved a firm that was listed in New York and affected American investors – were levelled against Adani, who is one of the world’s richest people, as well as seven other defendants.

The charges follow much turmoil for the Adani Group last year after short-seller Hindenburg Research issued a report that accused it of using offshore tax havens improperly – which the company denied.

Shares and bonds of Adani firms tumbled on Thursday and Adani Green Energy, the company at the centre of the allegations, also cancelled a $600 million sale of U.S.-dollar denominated bonds.

Arrest warrants have been issued in the U.S. for Adani and his nephew Sagar and prosecutors plan to hand those warrants to foreign law enforcement, court records show. Sagar is an executive director at Adani Green and currently oversees its “strategic and financial matters”.

Adani Group said in a statement that the allegations were “baseless and denied”, adding that it would seek “all possible legal recourse”.

U.S. federal prosecutors said the defendants agreed to pay the bribes to Indian government officials to obtain power supply contracts expected to yield $2 billion of profit over 20 years, and develop India’s largest solar power plant project.

They also said the Adanis and another executive at Adani Green Energy, former CEO Vneet Jaain, raised more than $3 billion in loans and bonds by hiding their corruption from lenders and investors.

The three were charged with securities fraud, securities fraud conspiracy and wire fraud conspiracy. The Adanis were also charged in a parallel U.S. Securities and Exchange Commission (SEC) civil case.

“Gautam and Sagar Adani were engaged in the bribery scheme during a September 2021 note offering by Adani Green that raised $750 million, including approximately $175 million from U.S. investors,” the SEC said in a press statement, adding that a company central to the scheme, Azure Power, use to trade on the New York Stock Exchange.

“The Adani Green offering materials included statements about its anti-corruption and anti-bribery efforts that were materially false or misleading in light of Gautam and Sagar Adani’s conduct,” it added.

Indian authorities, including the Securities and Exchange Board of India (SEBI), did not respond to requests for comment on the U.S. charges. Azure Power also did not respond to a request for comment.

Debopriyo Moulik, a criminal lawyer based in New Delhi, said he expected the Adani Group to seek a dismissal of the indictment.

“Since (an) arrest warrant has been issued, the U.S. authorities will have to approach the Indian government through the Indian embassy to execute such warrant in India,” he added. India and the U.S. have an extradition treaty.

Shares in Adani Green Energy plunged 16% and stocks for many other firms in the conglomerate, including flagship firm Adani Enterprises, lost more than 10%. The group lost $20 billion in value in Thursday’s trade in India, putting its firms’ combined market capitalisation at $148 billion. Before last year’s Hindenburg report, the group’s market value was $235 billion.

Adani dollar bonds slumped, with prices down between 3-5c on bonds for Adani Ports and Special Economic Zone.

‘NUMERO UNO’, ‘THE BIG MAN’

Prime Minister Narendra Modi’s administration has been accused by political opponents of favouritism toward Adani in government decisions. Modi and Adani, who both are from the western state of Gujarat, have denied impropriety.

On Thursday, India’s Congress party reiterated calls for a parliamentary investigation into alleged wrongdoing by the Adani Group. A probe by SEBI in the wake of the Hindenburg report is ongoing.

The unsealed criminal charges by the U.S. Attorney’s Office for the Eastern District of New York showed some conspirators referred privately to Gautam Adani with the code names “Numero uno” and “the big man,” while Sagar Adani allegedly used his cellphone to track specifics about the bribes.

Five other defendants were charged with conspiring to violate the Foreign Corrupt Practices Act, a U.S. anti-bribery law, and four were charged with conspiring to obstruct justice.

None of the defendants is in custody, a spokesperson for U.S. Attorney Breon Peace in Brooklyn said. Gautam Adani is believed to be in India.

Gautam Adani is worth $69.8 billion according to Forbes magazine, making him India’s second-richest man after Mukesh Ambani. He is one of the few billionaires formally accused in the United States of criminal wrongdoing.

Shares in GQG Partners, an Australia-listed investment firm that is a major Adani backer, slid 20%, its largest one-day fall since it listed three years ago. It said in a statement that it was monitoring the charges.

(Reporting by Nikunj Ohri and Dharamraj Dhutia; Additional reporting by Sumeet Chatterjee, Tom Westbrook, Yantoultra Ngui, Byron Kaye and Scott Murdoch; Editing by Aditya Kalra and Edwina Gibbs)

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