Renowned businessman Gautam Adani finds himself once again in the eye of the storm. Allegedly, Adani Group offered a bribe of approximately ₹2,250 crores ($265 million) to Indian officials to secure solar energy project contracts in India. Subsequently, funds were raised from American investors for these projects. The accusation further claims that this bribery and corruption information was not shared with the investors. The projects were projected to generate around $2 billion in profit over 20 years.
The revelation of deceit and bribery allegations in the US has sparked a fierce attack on the central BJP government by Congress. Opposition leader Rahul Gandhi in the Lok Sabha stated that there should be an immediate arrest of Adani, though he doubted any arrests or investigations will occur. He criticized that many, like chief ministers, end up imprisoned for far less, while Adani allegedly conducts scams of this magnitude with impunity. Gandhi demanded a JPC probe and vowed to raise this issue in Parliament. Meanwhile, BJP's Amit Malviya suggested that judgments should be reserved until guilt is proven.
Was American Invested Money at Stake?
Questions are being raised about how a project by the Adani Group in India led to investigations in the US concerning Indian officials. Actually, the whole issue ties back to Adani Green Energy Limited and another firm. The case was filed in a US court on October 24, 2024, with a hearing held in a New York court thereafter. The US attorney's office claims that the Adani Group proposed a bribe of around ₹2,250 crores to Indian officials for solar energy project contracts in India. These funds were purportedly raised under false pretenses from American and foreign investors and banks, making it an offense under American law since American investors' money was involved.
Hopes to Reap $2 Billion Profits
American prosecutors have charged Adani Group's chairman Gautam Adani, his nephew Sagar Adani, Vineet Jain, and six other executives over this matter. They assert that to secure solar energy contracts with regional electricity distribution companies, the Adani Group allegedly struck a deal to bribe Indian government officials with ₹2,250 crores ($265 million). This occurred between 2020 and 2024 but was withheld from American banks and investors while substantial funds for the solar projects were raised. The Adani Group aimed to make a $2 billion profit from these energy contracts.
What Does American Law Say?
Although the bribery charges are connected to Indian officials, American law states that such cases involving US investors or market interests can be pursued in court. Notably, during the bribery period, short-seller Hindenburg Research released a controversial report in 2023 accusing the Adani Group of stock manipulation and accounting fraud, leading to a $150 billion loss in market value for the group.
The Project Around Which Allegations Arose...
According to the indictment, Gautam Adani is the founder and chairman of Adani Energy Company. Sagar Adani serves as executive director at the Adani Green Energy branch. Ranjeet Gupta, a former CEO of Azure Power, along with advisor Rupesh Aggarwal, is also named. Indian energy and US issuer companies obtained a contract to supply 12 GW of solar power to the government-owned Solar Energy Corporation of India (SECI). However, SECI couldn't secure enough domestic buyers, leaving the deal precarious without them. As a result, both companies risked significant losses and allegedly resorted to planning bribes to Indian officials.
A Major Part of the Bribe Allegedly Went to Andhra Pradesh Officers
It was decided that government officials would be responsible for persuading state electricity distribution companies to engage in a power purchase agreement with SECI. A promise of approximately $265 million in bribes was made, with a substantial portion reportedly given to Andhra Pradesh officials.
Subsequently, some state electricity companies agreed and entered into agreements with SECI to purchase solar power from both companies. It is alleged that the Indian energy company and the US issuer collectively paid the bribes. To disguise their involvement, code names were employed. For example, Gautam Adani was referred to as 'Numero Uno' or 'The Big Man.' Communications occurred over encrypted messaging. These companies purportedly raised over $175 million from US banks and investors.
Meetings Were Held to Formulate Bribery Plans
Despite leadership changes within the US issuer altering operations significantly, Ranjeet Gupta led as CEO of Azure Power from 2019 to 2022. Rupesh Aggarwal took over from 2022 until 2023. Some project-involved officials were asked to resign, and meetings were conducted to strategize discreet bribe payments. There was also discussion of transferring parts of the project as a diversion. It's claimed that Gautam Adani personally met with government officials regarding these allegations.
Currently, US authorities are investigating whether the Adani Group employed bribery as a means to personally benefit by securing energy contracts and whether incorrect payments were made to Indian government officials. Reports indicate that following the US court hearing, arrest warrants were issued against Gautam Adani and his nephew.
Adani Group's Defensive Statement
The Adani Group dismissed these charges as baseless. However, they stressed that accusations remain unproven, and defendants are innocently presumed until proven otherwise. All viable legal avenues will be pursued. The Adani Group emphasizes its commitment to maintaining transparency and regulatory compliance across all sectors and assures stakeholders, partners, and employees that it is a law-abiding organization strictly adhering to laws.
Furthermore, the Adani Group mentioned that indictments were issued by New York's Eastern District US District Court against board members Gautam and Sagar Adani by the US Department of Justice. Board member Vineet Jain is also implicated. In light of these developments, their subsidiaries have decided against moving forward with proposed USD-denominated bond offerings for now. Following the accusations from America, Adani Group entities have canceled $600 million worth of bonds, as reported by Bloomberg.
