'Corrupt Solar Project': Major US bribery charges against Adani and what's next

Adani and its executives are also accused of making false and misleading statements to U.S. investors and lenders about the company’s anti-bribery commitments and practices while raising money from them.

Reuters

27 November 2024, 13:40

Last modified: 27 November 2024, 13:49

Indian billionaire Gautam Adani speaks at the opening ceremony after Adani Group completed the acquisition of Haifa Port in Haifa, Israel, on January 31, 2023. Photo: Reuters

“>

Indian billionaire Gautam Adani speaks at the opening ceremony after Adani Group completed the acquisition of Haifa Port in Haifa, Israel, on January 31, 2023. Photo: Reuters

Indian billionaire Gautam Adani has been accused by US prosecutors of conspiring with executives of a company formerly listed in New York to devise a $265 million scheme to bribe Indian officials to expand his solar energy business.

Adani and its executives are also accused of making false and misleading statements to U.S. investors and lenders about the company’s anti-bribery commitments and practices while raising money from them.

While Adani Group has denied the allegations as “baseless”, Indian government officials have not commented so far.

Stay updated, follow The Business Standard’s Google news channel

Here is an overview of the investigation and the allegations in the US indictment:

WHAT ARE THE MAIN CLAIMS?

US prosecutors have charged Gautam Adani, his nephew Sagar Adani, an executive at Adani Green, and six others in an alleged bribery scheme related to renewable energy projects in India that benefited the tycoon’s company and India’s Azure Power, which is listed on the NYSE. accused him of executing it. end of 2023.

The indictment shows that in 2020, Adani Green and Azure executives “knowingly and willfully conspired” and agreed to “corruptly” offer, authorize, and pay bribes to government officials in India to “obtain or retain business advantages.”

“Gautam S. Adani and seven other corporate executives allegedly bribed the Indian government to finance lucrative contracts,” said FBI Deputy Director-in-Charge James E. Dennehy.

On November 27, Adani Green said Gautam Adani was charged in the indictment with allegations of securities fraud conspiracy, wire fraud conspiracy, and securities fraud, but was not charged under the U.S. Foreign Corrupt Practices Act.

Adani has raised more than $3 billion in loans and bonds between 2021 and 2024, including from investors in the United States.

“Gautam and Sagar Adani were involved in a bribery scheme during Adani Green’s September 2021 bond offering, which raised $750 million, including approximately $175 million from U.S. investors,” the U.S. Securities and Exchange Commission said. he said.

Prosecutors alleged that Adanis made misleading statements to the public, the Indian stock market and investors earlier this year despite being aware of the US investigation in 2023.

Source: Reuters

“>

Source: Reuters

HOW WERE BRIBES TRACKED AND PAID?

Sagar Adani, managing director of Adani Green and nephew of Gautam Adani, used his mobile phone to track details of bribes offered to Indian officials, US officials have alleged.

U.S. officials said that in a meeting between some Adani and Azure executives in 2022, Gautam Adani detailed details of the bribery scheme, including steps he had personally taken to offer money to government officials.

Azure executives also prepared an analysis using Excel and PowerPoint to outline the different ways Adani Green was paid back for bribes it paid to benefit both companies. For one of the projects with a power of 2.3 gigawatts, the bribe was calculated to be approximately $30,000 per megawatt.

One avenue discussed was to describe the internal payment at Azure as a “development fee,” but US officials instead used another option, such as having Azure hand over one of its projects to Adani instead of part of the payment.

In its statement, Azure said that the former officials of the company named in the US indictment are no longer associated with the company and that the company continues to cooperate with US authorities.

WHAT WERE THE ENERGY PROJECTS IN QUESTION?

US officials called these transactions the “Corrupt Solar Project” in the indictment.

Between 2019 and 2020, Adani Green and Azure were awarded renewable energy tenders by the Solar Energy Corporation of India (SECI), an agency owned by the federal government.

U.S. officials alleged that Adani and others devised a scheme to bribe Indian government officials into making deals with SECI that would “benefit” Adani subsidiaries and Azure.

Adani facilities in the Indian states of Rajasthan and Gujarat were providing the electricity contracted in the Adani agreements. One of these important projects is the Adani energy park in Khavda, which the company says is the largest renewable energy project in the world.

Source: Reuters

“>

Source: Reuters

In March 2023, FBI special agents approached Sagar Adani with details of the grand jury’s ongoing investigation into the group and other organizations. They took custody of the electronic devices in Sagar’s possession and served him with the search warrant and grand jury subpoena.

The search warrant identified crimes, individuals, and entities being investigated by the United States for violations of the Foreign Corrupt Practices Act, securities fraud, and wire fraud.

Adani Group said in a statement that it would seek “every legal recourse possible.” The grand jury said that if any of the executives were found guilty of the charges, they would have to forfeit any property or income obtained directly or indirectly as a result of the crimes.

Federal prosecutors also issued arrest warrants for Gautam and Sagar Adani. The US Securities and Exchange Commission has called on Gautam Adani and his nephew Sagar to respond to the allegations.

Gautam and Sagar have not been arrested and their whereabouts are unknown, although they are believed to be in India.

Adani and its executives are also accused of making false and misleading statements to U.S. investors and lenders about the company’s anti-bribery commitments and practices while raising money from them.

Stay updated, follow The Business Standard’s Google news channel

Related Posts