The week started with a news lull. There was some excitement around the elections in Maharashtra and Jharkhand, but in election-addicted India, even this was somewhat tepid. Then, on Thursday morning, the news about US indictments of Gautam Adani and several others—to borrow from Miley Cyrus—came in like a wrecking ball. The slow spell was comprehensively shattered.
With India’s top businessman—ostensibly so close to the Narendra Modi government—accused of bribing state government officials, the ramifications have reverberated across political, legal, and business worlds, shaking them all. On top of it all, the case has laid bare the inefficiencies in India’s renewable energy market, which is what created the conditions for the alleged bribery scheme in the first place.
This is why the Adani indictment is ThePrint’s Newsmaker of the Week.
The indictments—issued by the US Department of Justice and the Securities and Exchange Commission (SEC)—were wonderfully framed, laying out the allegations in simple language. The crux of the matter was that Adani Green Energy and the Mauritius-registered Azure Power, both formerly listed on US stock exchanges, had allegedly misled American investors by claiming they had no involvement in corrupt practices abroad.
The indictments were clear—several members of the top management of both Adani Green Energy and Azure Power allegedly conspired to bribe various state government officials to ensure state electricity distribution companies (DISCOMs) signed power supply agreements with the Solar Energy Corporation of India (SECI). These PSAs, in turn, would have allowed SECI to buy solar power from Adani and Azure at high rates.
Also read: Adani should take lessons from Tatas, Birlas—maintain arm’s length distance from politicians
A friend of a…
While the indictment by the Department of Justice fell short of actually naming the main beneficiaries of the alleged bribe-taking, it did say that about 86 per cent of the planned bribes were to be given to a highly placed official in the Andhra Pradesh government. The indictment by the US SEC, on the other hand, was not so circumspect.
It categorically stated that Gautam Adani, in 2021, met with the Andhra Pradesh Chief Minister— Jagan Mohan Reddy of YSRCP held the position then—and “at or in connection with that meeting, paid or promised a bribe to Andhra Pradesh government officials” to enter into power supply agreements with SECI.
The Adani Group quickly denied the allegations, calling them baseless and stating that it would be seeking all legal remedies.
Notably, the Chandrababu Naidu-led Telugu Desam Party (TDP), usually extremely quick to find fault with the Jagan government, failed to capitalise on this. Why? ThePrint has learnt that the TDP, a BJP ally, is wary of launching an attack that would compromise Adani. A friend of a friend is a friend, and a friend of an enemy is an enemy. But what happens to somebody who is both? That seems to be Naidu’s conundrum.
The indictments also show an absolute lack of self-preservation on the part of Gautam Adani, his nephew Sagar, and their co-conspirators. How else would you describe the fact that Sagar’s phone contained point-by-point details of the alleged bribery amounts to be paid, or that Gautam Adani apparently emailed documents to himself that he then allegedly concealed from Indian stock exchanges?
The comedy of errors doesn’t end there, though. Adani’s co-conspirators at Azure Power tried to throw him under the bus when the heat intensified under the US authorities’ gaze. We’re back to the whole friend-enemy concept.
Also read: Indicted by US, sentenced by the market. Damage to Adani this time will be deeper, longer lasting
Tough times ahead
All said and done, the matter is serious for the company, given how Adani stocks lost a whopping Rs 2.6 lakh crore in market capitalisation on Thursday, followed by another Rs 35,000 crore on Friday.
Adani Green Energy was also forced to abandon plans to raise $600 million through dollar-denominated bonds, something that will potentially affect its growth plans and could—to a limited extent—impact India’s renewable energy push.
More troubling for the Adani Group is the blow from Kenya, which announced it was scrapping a $2.5 billion deal with the group, citing the indictment.
The charges could also lead to a SEBI investigation, following the apparent misleading statements to the media and Indian stock exchanges.
But can Indian authorities launch their own investigations based on the findings of a foreign government? There is precedent. In at least two cases in the past, the CBI launched an investigation following findings made by the US Department of Justice.
Finally, with SECI in the spotlight, the case strengthens the argument that perhaps DISCOMs and solar power producers should haggle and sign agreements between themselves.
All of this comes just days before the winter session of Parliament. Conspiracy theorists say the timing was not coincidental. Whatever the case may be, Prime Minister Narendra Modi is in for a tough time upon his return from Guyana.
Views are personal.
(Edited by Theres Sudeep)