US prosecutors have indicted Gautam Adani, his nephew Sagar Adani, and six others for allegedly paying ₹2,029 crore ($265 million) in bribes to Indian government officials to secure lucrative solar power contracts. These bribes were reportedly paid between 2020 and 2024, with the aim of generating $2 billion in profits for the Adani Group.
Key Allegations
The case centers around contracts awarded by the Solar Energy Corporation of India (SECI), a state-owned entity responsible for facilitating renewable energy projects in India.
1. The Solar Power Deal:
– The Adani Group and Azure Power (a US-listed renewable energy company) secured a contract to provide 12 GW of solar power to SECI.
– However, SECI struggled to find buyers in India willing to purchase the solar energy, putting the deal and expected profits at risk.
2. The Alleged Bribery Scheme:
– To address the impasse, the Adani Group and Azure Power allegedly devised a plan to bribe Indian officials.
– These officials were to pressure state electricity distribution companies (SDCs) to sign Power Purchase Agreements (PPAs) with SECI, enabling the solar energy projects to proceed.
3. Payments and Distribution:
– The promised bribes, totaling $265 million, were largely directed toward officials in Andhra Pradesh, among other states.
– The indictment claims the two companies coordinated closely to split the bribe payments, using encrypted messages and code names such as “Numero Uno” and “The Big Man” to refer to Gautam Adani.
Concealment and Execution
– Encrypted Communication: To avoid detection, the conspirators used encrypted messaging and code names.
– Covering Tracks: The defendants allegedly disguised bribes as project-related fees and transferred portions of the project to settle obligations covertly.
– Leadership Changes: Internal shake-ups at Azure Power between 2019 and 2023 caused disruption, but bribe payments continued.
Impact on US Markets
Although the bribery targeted Indian officials, US law permits action when corruption involves American markets or investors.
– The Adani Group allegedly concealed this bribery scheme while raising funds from US investors and institutions.
– The indictment accuses the Adani Group of misrepresenting financial and governance practices to secure billions of dollars in funding.
Other Key Developments
The case coincides with the release of the 2023 **Hindenburg Research Report**, which accused the Adani Group of stock manipulation and accounting fraud, erasing over $150 billion in market value.
Prosecutors’ Charges
– US prosecutors allege conspiracies to commit **securities fraud**, **wire fraud**, and violations of the **Foreign Corrupt Practices Act (FCPA)**.
– Gautam Adani is directly accused of influencing SECI’s decision-making to facilitate the project transfer and bribes.
Adani Group’s Response
The Adani Group has denied the allegations, stating they have canceled a $600 million bond offering amid these developments. The company has vowed to address the charges in court.
The case highlights the broader implications of cross-border corporate governance, investor protections, and anti-corruption enforcement.