On November 20, 2024, Adani Green Energy’s $600 million bond offer received a subscription three times higher in the US. This was a financial victory after last month’s failed attempt. This big company in the renewable energy sector had planned to refinance its existing loan. That same day, though, in New York, 8,000 miles away, a court was handling a different kind of bond. It was a charge sheet, a legal document alleging a bribery scheme that would soon shake Gautam Adani’s business empire. These charges included a $265 million scam, which is equivalent to about ₹2,200 crore.
In January 2015, Gautam Adani started Adani Green Energy. His goal was to help Prime Minister Modi’s plan to achieve 100 gigawatts of solar power by 2022. Adani Green soon became a top company in India’s renewable energy sector. It developed large projects like Kamuthi Solar Power Plant in Tamil Nadu, which covers 22,000 acres. This success made Adani Green India’s leading renewable energy company, attracting significant international investment, including from the United States.
By 2020, Adani Green had acquired two-thirds of the solar projects awarded by SECI (Solar Energy Corporation of India). These contracts were for solar energy at a rate of ₹2.92 per kilowatt-hour. SECI’s job is to collect contracts from private energy builders. It then sells this electricity to various state distribution companies, known as Discoms.
The US charge sheet claims that the discoms initially refused to buy power from SECI at the asking prices. According to the report, these prices were higher than the market rate of ₹1.99 per unit. To deal with this, Adani allegedly bribed government officials in three different states of India. Its purpose was to convince them to buy electricity at higher prices. The total amount of this alleged bribe was ₹2,029 crore (about $265 million).
Payment in Odisha and Andhra Pradesh
According to the charge sheet, lakhs of dollars were paid to officials in Odisha under Chief Minister Naveen Patnaik. Following these payments, in July, the Grid Authority of Odisha agreed to purchase 500 MW of power from SECI. Price was ₹2.61 per unit, discounted but still high.
In August, in Andhra Pradesh, the Chief Minister
Under Jagan Mohan Reddy, huge bribes were allegedly paid of ₹1,750 crore (which is equivalent to $228 million). The payment was made in exchange for an agreement to purchase 7 gigawatts of power from SECI.
By selling electricity at these increased prices, Adani
Green reportedly planned to make at least $4 billion in profit over the next decade. This would have been at the expense of profit discoms and, ultimately, paying consumers.
Objections and more allegations
Not everyone agreed with these high prices. Pulla KV Naidu, who was then the Finance Minister and head of the Public Accounts Committee in Andhra Pradesh, had refused to buy electricity at such inflated prices. CPI state secretary K Ramakrishna also opposed the move and filed a petition in the Andhra High Court.
The charge sheet further claims that between July 2021 and February 2022, bribes were also paid to officials in Jammu and Kashmir, Chhattisgarh and Tamil Nadu. These payments were allegedly made to obtain the SECI electricity supply agreement. During this time, Adani Green was doing a road show in America. The company’s motive was to raise $750 million through green bonds. While doing so, it presented an image of complete compliance and good corporate governance. However, the charge sheet shows that it was violating US laws related to wire fraud, securities fraud and bribery.
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American Indictment points to a large bribery network. Adani is accused of paying bribes not only for his projects but also on behalf of Azure Power. Azure Power is an Indian subsidiary of a Canadian company. Azure Power had won the remaining one-third of the 4-gigawatt SECI deal. Since Azure Power did not deal in cash, a separate plan was reportedly made for Adani to repay the money. Azure Power will transfer the 2.3-gigawatt power project back to Adani via SECI, claiming that the project is not beneficial.
SEC investigations and whistleblowers
The Securities and Exchange Commission of America (SEC) probably got a tip. The tip may have come from “Co-Conspirator One”, which may have been Alan Rossling, non-executive chairman of Azure Power Global in Canada. In March 2022, the SEC sent a General Inquiry Notice to Azure Power, asking for details of all their transactions. Azure Power was alarmed by this notice. Azure Power’s COO, Murali Subramaniam, who is listed in the Indictment as “Co-Conspirator Two”, is believed to have become the second whistleblower in the case. It is not clear whether Azure India CEO Ranjit Gupta or COO Subramaniam told Adani about the SEC notice. However, to avoid trouble, both resigned from their positions at Azure.
Hiding the alleged scheme
After his resignation, Azure’s new leadership and representatives of CDPQ (Canadian pension fund and Azure’s Majority Shareholder) allegedly created a plan to withhold information. The purpose of this plan was to mislead the government investigation. He launched an internal investigation with a US-based law firm, but only shared selective information. They took strong measures to hide their involvement by destroying and hiding evidence. He also allegedly accused Gautam Adani and Adani Green CEO Vinny Jain, suggesting that these people were behind the payment of bribes while they hid their own deeds.
In March 2023, Sagar Adani, who was not aware of SEC’s investigation, went to US. Special agents of FBI were waiting for him. He served them a grand jury summons and search warrant, and took their electronic devices. He was accused of securities fraud, wire fraud and tampering with evidence related to bribery. These allegations included him, Gautam Adani and Vinny Jain.
The SEC had significant evidence, including a photograph taken by Jain. This picture allegedly showed Azure was to pay ₹638 crores to Adani Green for bribe. Adani officials had also kept spreadsheets in detail to track payments and commitments allegedly made to different officials. Gautam Adani was called “number one” and Vinny Jain was called “number one minus one” by Azure in a spreadsheet.
When Bloomberg published an article about the alleged scandal, Adani Group declined to know about the investigation. He sent emails to financial institutions and investors calling the news article baseless, malicious and defamatory.
Two cases against Adani
Adani has two main cases in the US:
The SEC seems determined to pursue these charges. He sent summons to the houses of Gautam Adani and Sagar Adani in Ahmedabad. Adani denied the allegations but said they would cooperate. He also claimed that neither the elder Adani nor the younger Adani have been accused of violating the Foreign Corrupt Practices Act (FCPA) or the fifth charge.
Bad news often spreads faster than facts. Some damage has already been done due to this scandal. These developments have led Kenya to cancel its proposed Airport Expansion Project and a Power Grid Project, worth over $3 billion in total.
However, Adani’s main supporter, Rajeev Jain of GQG Partners, continues to support Adani. Sri Lanka is also continuing its container terminal project with Adani. Adani Group Cancels Its Successful $600 Million Bond Raise. Instead, it will now depend on Indian banks to meet its loan needs. Group claims to have enough cash, ₹53,000 crore (over $6 billion approximately) to cover its date servicing for the next 28 months, by which time they expect this matter to be resolved.
Several Fortune 500 companies, such as Siemens, Oracle, and Walmart, have also faced similar charges before. He often resolved these cases by treating them as minor mistakes or by awarding penalties without confessing.
In India, the opposition Congress tried to criticize Adani over these allegations. However, he soon realized that these allegations were related to states where he or his allies were in power.
Another possible outcome may be on the brand image of Andhra Pradesh. This scandal may make it difficult for Chief Minister Chandrababu Naidu to attract international investment. The ruling BJP government has strongly supported Adani. He claims that this allegation is a “witch hunt” to destabilize India’s global ambitions.
The further legal battle will determine the full impact of these allegations on Gautam Adani’s empire and India’s renewable energy sector. US officials are pushing for justice, while Adani maintains his innocence and is trying to deal with this difficult legal challenge.
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