Once again, business mogul Gautam Adani is making headlines. Allegations have surfaced that he offered bribes of approximately ₹2,250 crores ($265 million) to Indian officials to secure solar energy project contracts in India. Consequently, the Adani Group raised funds from US investors for these projects, allegedly without disclosing the corrupt practices. These projects were estimated to yield nearly $2 billion in profits over 20 years.
Following the emergence of fraud and bribery charges against Adani in the US, the Congress party has launched a sharp attack on India’s BJP government. Opposition leader Rahul Gandhi remarked that Adani should be arrested immediately, but neither arrest nor investigation is likely to occur. He highlighted disparities, citing cases where other leaders faced severe consequences for lesser charges. Rahul demanded a JPC investigation and aimed to bring this issue forward in Parliament. Meanwhile, BJP leader Amit Malviya suggested it is prudent to read thoroughly before reacting, emphasizing the presumption of innocence until proven guilty.
Was American Money Involved in the Project?
Questions arise: how did investigations concerning Indian officials begin in the US, despite the project being based in India? The matter involves Adani Group’s company, Adani Green Energy Limited, and another firm. On October 24, 2024, the case was filed in a US court, and a hearing was conducted in New York. The US Attorney's Office claims that Adani Group offered bribes of approximately 2200 crore rupees to Indian officials to secure contracts related to solar energy in India, lying to American, foreign investors, and banks. The US case exists because American investors' funds were involved, and US law deems utilizing such funds for bribes a crime.
$2 Billion Profit Anticipated
US prosecutors have implicated Gautam Adani, his nephew Sagar Adani, Vineet Jain, and six other executives of the Adani Group. They allegedly made deals to bribe Indian government officials with 2200 crore rupees ($265 million) between 2020 and 2024, details hidden from US banks and investors while raising billions in funding for the solar energy project. Adani Group aimed to secure $2 billion in profit from obtaining the energy contracts.
What Does US Law Say?
While bribery charges involve Indian officials, US law allows prosecution if corruption cases pertain to American investors or market interests. At the same time as the bribery allegations, the US 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.
The Accused Project...
According to the US indictment, Indian energy company founder and chairman Gautam Adani, and executive director Sagar Adani of Adani Green Energy, along with former Azure Power CEO Ranjit Gupta and consultant Rupesh Agarwal, were involved in securing a 12 GW solar energy contract from the state-owned Solar Energy Corporation of India (SECI). However, unable to find buyers in India, both companies faced significant risk without consummating the deal. Subsequently, they planned to bribe Indian government officials to facilitate agreements with state power distribution companies to purchase solar energy from SECI.
Bribes Largely Directed to Andhra Pradesh Officials?
The plan intended that government officials would ensure state electricity distribution companies entered into power supply agreements with SECI, with bribes promised amounting to $265 million, largely allocated to officials in Andhra Pradesh. Following these bribes, some state electricity companies agreed to deals with SECI to purchase solar energy from both companies. Allegations suggest Indian energy companies and US issuers collaborated to pay these bribes, concealing their involvement using code names, such as referring to Gautam Adani as 'Numero Uno' or 'The Big Man', using encrypted messaging for communications. Together, they reportedly raised over $175 million from US banks and investors.
Meetings for Bribe Planning
During leadership transitions within US issuers, significant changes occurred. Ranjit Gupta served as Azure Power CEO from 2019 to 2022, succeeded by Rupesh Agarwal from 2022 to 2023. Some project-related officials were asked to resign. Meetings discussed discreet ways to make bribe payments without detection, including potentially transferring project parts. Allegedly, Gautam Adani also personally met with government officials to facilitate these deals.
Currently, US authorities are probing whether Adani Group attempted to bribe their way to profit from energy contracts, and if they made unlawful payments 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 Response...
In response, the Adani Group declared the allegations baseless, asserting the presumption of innocence until proven guilty, and planning all possible legal defenses. They reiterated their commitment to transparency and regulatory compliance in all sectors, reassuring stakeholders and employees of their lawful practices.
The Adani Group acknowledged that charges have been filed by the US Department of Justice and the SEC against board members Gautam and Sagar Adani in New York's Eastern District. The US Department of Justice also included board member Vineet Jain in the allegations. In light of these events, the Group's subsidiaries have decided not to proceed with proposed USD-denominated bond offerings. According to Bloomberg, following US allegations, Adani Group companies canceled $600 million in bonds.
