New Delhi: A US court has indicted Adani Group chairman Gautam Adani, his nephew Sagar Adani, and several others for allegedly planning to offer bribes worth as much as Rs 2,029 crore to government officials in India to ensure business came to Adani companies, conspiring to hide this from US investors who lent money to the company, and obstructing investigation by US authorities into the matter.
In response to this news, shares of the Adani Group’s companies fell by more than 20 percent as trading opened in India Thursday morning, and the Group’s energy company—Adani Green Energy—announced it was putting on hold its plans to raise $600 million through US dollar denominated bonds.
The indictment was filed in the US district court in the Eastern District of New York on 24 October and made public late Wednesday night (India time).
According to it, beginning in or about 2020, Ranjit Gupta, who was CEO of Mauritius-registered Azure Power Global Ltd between 2019 and 2022, and another employee of the company “knowingly and willfully conspired” with each other and others, including but not limited to Gautam S. Adani, Sagar R. Adani, and Vneet S. Jaain “to corruptly offer, authorise, promise to pay and to pay bribes to and for the benefit of government officials in India”.
The aim of these alleged bribes, the indictment said, was to ensure that Indian state electricity distribution companies entered into contracts with the government’s Solar Energy Corporation of India (SECI), so that the Adani Group and its energy companies could obtain and retain business.
Gautam Adani’s nephew Sagar is an executive director on the board of Adani Green Energy Limited, having joined the Adani Group in 2015. Vneet S. Jaain is the managing director and CEO of Adani Green Energy Ltd.
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The root of the alleged bribery
According to the indictment, between December 2019 and July 2020, Azure Power and Adani Green Energy were awarded a tender by SECI, under which Azure Power was to supply 4 GW of solar power and Adani Green Energy was to supply 8 GW of solar power to SECI.
This can be verified through statements by the companies themselves. On 9 June, 2020, Adani Green Energy announced that it had won “the single largest solar development bid ever awarded”, adding it would be supplying SECI 8 GW of solar power over a period of 60 months. Azure Power made a similar statement regarding the contract in July 2020.
Under the agreement, SECI was to find state electricity distribution companies that would purchase the 12 gigawatts of power that was being supplied by Azure Power and Adani Green Energy.
“The high energy prices contemplated in the LOAs (letters of award) made it difficult for SECI to find Indian state buyers of energy under the manufacturing linked project,” the indictment said.
“After the award of the manufacturing linked project, SECI unsuccessfully sought out Indian state and union governments to purchase the 12 gigawatts of solar power pursuant to PSAs (power sale agreements).”
The indictment added that, unless SECI could secure a PSA with a government buyer, it would not be able to go ahead with the power purchase agreement (PPA) it had agreed with Adani Green Energy and Azure Power.
This, it said “jeopardised the lucrative LOAs, and corresponding revenue” that the two companies anticipated to receive from the SECI contract.
On the hunt for a govt purchase agreement
As a result, in or about 2020, the defendants Gautam Adani, Sagar, Jaain, and several others “devised a scheme to offer, authorise, make and promise to make bribe payments to Indian government officials in exchange for the government officials causing state electricity distribution companies to enter into PSAs with SECI.
It added that Gautam Adani personally met with “a high-ranking government official of Andhra Pradesh” at least thrice between August and November 2021 to push for the execution of a PSA between SECI and Andhra Pradesh’s state electricity distribution companies.
“In furtherance of the Bribery Scheme, the co-conspirators, through Gautam S. Adani, Sagar R. Adani, Vneet S. Jaain and others, had offered and promised to Indian government officials approximately 2,029 crore rupees (approximately $265 million) in bribes in exchange for Indian government officials causing the state electricity distribution companies to execute PSAs under the Manufacturing Linked Project, which would benefit the Indian Energy Company’s subsidiaries and the U.S. Issuer,” the indictment said.
“Approximately 1,750 crore rupees (approximately $228 million) of the corrupt payments was offered to Foreign Official #1 [the Andhra Pradesh government official] in exchange for Foreign Official #1 causing Andhra Pradesh’s state electricity distribution companies to agree to purchase seven gigawatts of solar power from SECI under the Manufacturing Linked Project,” it added.
Following the alleged promise of bribes to Indian government officials, electricity distribution companies for Odisha, Jammu and Kashmir, Tamil Nadu, Chhattisgarh and Andhra Pradesh entered into PSAs with SECI under the project for which Adani Green Energy and Azure Power had been awarded contracts.
Andhra Pradesh’s electricity distribution companies entered into a PSA with SECI “on or about December 1, 2021”, under which the state agreed to purchase about 7 GW of solar power, “by far the largest amount of any Indian state or region”, the indictment added.
“With executed PSAs under the Manufacturing Linked Project, SECI could enter into corresponding PPAs to purchase solar power from the Indian energy company’s subsidiaries and the U.S. issuer,” the indictment read. “In or about and between October 2021 and February 2022, the U.S. Issuer and the Indian energy company, through subsidiaries, executed PPAs with SECI.”
Following the PPAs, Azure Power agreed to supply SECI with approximately 650 MW of solar power for Chhattisgarh, Tamil Nadu, Odisha and Jammu and Kashmir and approximately 2.3 GW of solar power to Andhra Pradesh.
Similarly, Adani Green Energy and its subsidiaries executed PPAs with SECI under which the subsidiaries agreed to supply SECI with solar power for Chhattisgarh, Tamil Nadu, Odisha, Jammu and Kashmir and Andhra Pradesh.
“During and in furtherance of the Bribery Scheme, the defendant Sagar R. Adani used his cellular phone to track specific details of the bribes offered and promised to government officials (the ‘Bribe Notes’),” the indictment said.
“The Bribe Notes identified: (i) the state or region for which government officials had been offered a bribe; (ii) the total amount of the offered bribe; and (iii) the approximate amount of solar power the state or region would agree to purchase in exchange for the bribe.”
It added that, in most instances, the bribe notes also identified the per megawatt rate for the total bribe amount offered, the abbreviated titles of the government officials who would receive the bribes, and the allocation of the total bribe amount among government officials within each state and region.
Between 2020 and 2024, while allegedly engaged in this “bribery scheme”, Gautam Adani, Sagar Adani and Vneet Jaain were simultaneously trying to raise funds in the US “on the basis of false and misleading statements, as well as material omissions that rendered certain statements misleading” regarding Adani Green Energy’s alleged involvement in the scheme, the indictment said.
An earlier version of this report referred to Vneet S. Jaain as MD and CEO of Adani Power. Jaain is MD and CEO of Adani Green Energy Ltd.
(Edited by Tikli Basu)
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Adani and his entire family must be extradited to USA to face justice.
Rahul Gandhi is correct in his assertions that Modi simply does not have the strength to go after Adani. Modi created a monster and now the monster has grown out of control.
It is in India’s best interests to get rid of such corrupt businessmen. Extraditing him to the US would restore public trust in Modi’s administration.