The bribery scandal that has engulfed the Adani Group is far more serious than the raft of allegations that the American short-seller, Hindenburg Research, made last year against the richest tycoon in India and his ports-to-energy conglomerate, which has profited enormously from its close association with the Narendra Modi government. Consequently, it will not be easy — or wise — to swat away the US department of justice’s indictment and the separate US market regulator’s complaint filed with the Eastern District Court of New York and call them a bundle of lies. The Group stands accused of doling out bribes worth $265 million to government officials in five Indian states — Andhra Pradesh, Tamil Nadu, Odisha, Chhattisgarh and Jammu and Kashmir — to buy its expensive solar power. The case rests on a trove of documents and a trail of electronic messages that the authorities in the United States of America have been able to access, possibly with the help of unnamed whistle-blowers. The bribery suit stems from alleged violations of the Foreign Corrupt Practices Act in the US which carries severe penalties if the charges are proven. The Adanis have tried to play down the enormity of the scandal, drawing comfort from a statement in the department of justice’s press release that said that the eight defendants, including Gautam Adani, were “presumed innocent unless and until proven guilty”. This is a fundamental precept in law. But the markets have already been spooked by the developments. The shares of Adani Green Energy — the company that spearheads the Group’s renewable energy ambitions — have tumbled almost 40% from the highs in November. Investors are looking for some clarity and will be waiting for the Adani Group to come out with its promised “detailed comment” on the charges.

The scandal raises legitimate concerns about corporate governance standards within the Adani Group. It also risks tarring the India growth narrative that Mr Modi’s government has fashioned into a compelling argument to attract foreign investment. It is not clear whether the new federal attorneys appointed by the incoming Donald Trump administration will pursue the case as vigorously as their predecessors. The bigger concern is whether Mr Trump will exploit the lever that he now wields over Mr Modi’s favourite industrialist. The US has been trying to tear down the barriers that limit access to the Indian market. Mr Trump has to please his own crony capitalist, Elon Musk, who has been looking to find a toehold in India.