Long Arm of the US Justice Department and Controversy Continue to Hound the Adani Group
Adani Group Faces Dual U.S. Legal Challenges: New Iran Sanctions Investigation Adds to Existing Bribery Case
Adani Group Faces Fresh Iran Sanctions Investigation
The business conglomerate of Indian billionaire Gautam Adani, Asia's second-richest man, finds itself entangled in mounting legal trouble from the United States, with two separate but highly consequential investigations threatening to upend his group’s global ambitions. While his legal team is working to persuade the Trump administration to dismiss a high-profile bribery case, fresh scrutiny over possible violations of U.S. sanctions on Iran has opened up a new and serious legal front. Together, these cases expose the Adani Group to significant reputational, regulatory, and operational risks at a time when the company is already under intense and growing global scrutiny.
The Iranian Sanctions Investigation
DOJ Probe into LPG Imports
The latest probe by the U.S. Department of Justice (DOJ) focuses on suspected imports of Iranian liquefied petroleum gas (LPG) by the Adani Group through its Mundra port in Gujarat. As reported by the Wall Street Journal, investigators are examining shipping patterns and port calls by vessels that may have disguised their links to Iran using tactics commonly associated with sanctions evasion. Notably, the vessel Neel (formerly SMS Bros) is at the centre of this scrutiny. Although its tracking data placed it in Iraq on April 3, 2024, satellite imagery allegedly showed it docked at Iran’s Tonbak port.
Evidence of Potential Sanctions Evasion
The circumstantial evidence is striking. Following the suspected Iranian port call, Neel was tracked off the UAE coast with signs of being laden with cargo, even though it never docked at Oman’s Sohar port, its declared origin. Subsequently, Adani Global PTE reportedly chartered the ship for a delivery to Mundra, with Indian customs records showing a matching LPG import valued at over $7 million. The DOJ is also examining three other tankers exhibiting similarly suspicious AIS signal behaviours and direct or indirect links to Adani operations.
Adani Group's Response to Sanctions Allegations
The Adani Group has denied all allegations, stating it neither knowingly handles Iranian-origin cargo nor owns or operates the vessels in question. The company has called the WSJ report “baseless and mischievous,” insisting that all transactions were conducted in good faith through third-party logistics firms, and supported by documentation citing Oman—not Iran—as the point of origin. LPG imports, it further noted, form a small portion of its total revenue and should not be overemphasised.
The Existing Bribery Case
The November 2024 Indictment
Parallel to the sanctions probe, the Adani Group is already battling a bribery indictment filed in November 2024 in the Eastern District of New York. The five-count indictment accuses Gautam Adani, his nephew Sagar Adani, and Adani Green Energy CEO Vneet S. Jaain of orchestrating a bribery scheme worth over $250 million to secure solar energy contracts in India. These contracts were projected to yield $2 billion in long-term profits. The charges range from securities fraud and wire fraud to violations of the Foreign Corrupt Practices Act (FCPA), with the alleged concealment of the scheme while raising funds from U.S. investors.
Efforts to Dismiss the Bribery Charges
In response, Adani’s legal team has launched an intense lobbying campaign in Washington. Engaging with senior Trump administration officials, they argue that continuing the case contradicts current U.S. policy priorities. The legal strategy has been bolstered by the February 2025 executive order signed by President Trump that temporarily halts FCPA enforcement, citing its negative impact on U.S. competitiveness. This has already led to the dismissal of at least one major FCPA case, and Adani’s team hopes the same outcome will apply to them.
Political and Policy Context
Trump Administration's Approach to FCPA Enforcement
The Trump administration’s freeze on FCPA enforcement has brought sweeping changes to how corruption cases involving foreign entities are handled. The dismissal of the Cognizant executives’ case has set a precedent, and prominent congressional voices within the Republican party have begun questioning the merits of the Adani prosecution. Six Republican lawmakers have even written to Attorney General Pam Bondi, warning that such legal action could jeopardise diplomatic and trade relations with India.
Iran Sanctions Framework
In contrast, the administration’s stance on Iran remains uncompromising. Renewed declarations in May 2025 prohibit any purchases of Iranian petroleum products, with secondary sanctions threatened for violators. These policies trace back to the U.S. withdrawal from the JCPOA in 2018 and have only intensified amid worsening Middle East tensions. Thus, while the Adani Group may find relief on the FCPA front, any proven violation of Iran sanctions could prove significantly more difficult to dismiss.
Business and Market Implications
Impact on Adani Group Operations
Caught between two federal investigations, Adani’s global ambitions have suffered. Plans to invest $10 billion in U.S. infrastructure have been paused since the bribery indictment, though recent policy shifts under Trump have revived internal discussions about re-engaging with U.S. projects. Reportedly, sectors under reconsideration include nuclear power, utilities, and a port development on the U.S. east coast. Still, the shadow of dual investigations looms large.
Market Reactions and Financial Impact
The Iranian probe has revived memories of the Hindenburg Research report in early 2023, which accused the Adani Group of long-standing stock manipulation and fraud. The report precipitated a $135–150 billion wipeout in the group’s market value and forced the cancellation of a massive ₹20,000 crore follow-on public offering (FPO). Regulatory scrutiny intensified in India as well, further complicating the group’s financial landscape.
Yet, signs of recovery have emerged. In May 2025, the Life Insurance Corporation of India (LIC) subscribed to a ₹5,000 crore non-convertible debenture issue by Adani Ports, the largest such domestic bond in the group’s history. This move, seen as a vote of confidence from a major institutional investor, indicates a pivot in strategy—from equity fundraising to long-term debt instruments—amid continuing reputational risk.
LIC’s Controversial Backing for Adani Ports
The LIC investment, however, has stirred controversy. While the Life Insurance Corporation of India (LIC) was historically 100% government-owned, it is now a publicly listed company with the Government of India holding a majority 96.5% stake, and the rest held by private investors following its May 2022 IPO. With a market capitalization of around ₹6 lakh crore (approx. $75 billion), LIC remains India’s largest institutional investor. Critics, however, question the prudence of funnelling substantial public and institutional funds into the Adani Group, which remains under active international investigation.
LIC’s stock has seen notable volatility post-IPO. After peaking near ₹1,222 in 2024, it now trades around ₹960–₹965—down 21% from its 52-week high but still well above its low of ₹715. Analysts are cautiously optimistic, with 2025 price targets ranging from ₹1,065 to ₹1,150, implying a 10–20% upside. LIC posted a strong FY24 net profit of ₹40,916 crore, up 13.7% year-over-year, underscoring its robust fundamentals despite market fluctuations.
This bond subscription signals a cautious return to capital markets for the Adani Group, marking a strategic shift from ambitious equity offerings—halted after the 2023 Hindenburg report—to long-term debt backed by domestic institutional investors. It may shape the group’s funding strategy amid ongoing legal and reputational challenges.
Summing Up: Legal Merits and Diplomatic Reciprocity
Gautam Adani Group’s entanglement in U.S. legal proceedings has evolved into a dual-front crisis, with sanctions evasion allegations compounding an already complex bribery case. While the Trump administration’s softening stance on FCPA enforcement has offered a possible path to legal reprieve, the fresh Iran-linked investigation injects renewed uncertainty into the group’s international prospects.
Although the U.S. Department of Justice (DOJ) is historically reputed to operate independently of the White House, the manner in which the Trump 2.0 Administration has been directing—or "strongly recommending"—specific courses of action to the DOJ creates enough room for speculation. It raises the possibility that the eventual outcomes of the Adani Group’s legal battles may hinge as much on legal merits as on diplomatic reciprocity within the ever-evolving framework of India-U.S. relations.
These developments underscore the expanding reach of U.S. extraterritorial enforcement mechanisms and the geopolitical vulnerabilities faced by multinational businesses navigating sensitive global supply chains. For the Adani Group, the coming months will be critical—not only for its courtroom fate in America but for its broader credibility in global markets.
How this legal drama unfolds will likely shape not just the future of India’s most controversial business empire but also set the tone for corporate compliance expectations in a world increasingly shaped by geopolitics, sanctions, and reputational risk.