NEW YORK (Reuters) – In June 2020, the renewable energy company owned by Indian billionaire Gautam Adani won what he called the largest solar development bid ever awarded: a contract to supply eight gigawatts of electricity to a state-owned power company.
But there was a problem. Local energy companies did not want to pay the prices offered by the national company, undermining the agreement, according to US officials. In order to secure this agreement, Adani is said to have decided to bribe local officials to persuade them to buy electricity.
The case is at the heart of US and civil charges unsealed Wednesday against Adani, who is not in US custody and is believed to be in India. His company, the Adani Group, said the allegations were “absurd” and that it would pursue “every legal action possible.”
The alleged hundreds of millions of dollars in bribes promised to local Indian officials caught the attention of the US Department of Justice and the Securities and Exchange Commission as Adani’s companies sought funding from US investors in several transactions starting in 2021.
This account of how the scheme was carried out is taken from the prosecution’s 54-page indictment of Adani and seven of his associates and two similar SEC complaints, which specifically mention electronic messages between alleged participants.
In early 2020, the Solar Energy Corporation of India awarded Adani Green Energy and another company, Azure Power Global, contracts for a 12-day solar power project, expected to generate billions of dollars in revenue for both companies, according to the lawsuit.
It was a major step forward for Adani Green Energy, headed by Adani’s grandson, Sagar Adani. Until then, the company had only earned about $50 million in its history and had yet to turn a profit, according to the SEC complaint.
But the move soon hit the streets. Local energy distributors have been reluctant to commit to buying new solar power, hoping that prices will fall in the future, according to an April 7, 2021 report by the Institute for Energy Economics and Financial Analysis, a think tank.
Sagar Adani and Azure’s CEO at the time discussed delays and revealed bribes on the encrypted messaging application WhatsApp, according to the SEC.
When the CEO of Azure wrote on November 24, 2020, that local energy companies “are being encouraged,” Sagar Adani is said to have replied, “Yes … but the optics are difficult to close. to the CEO, “As you know, we have doubled the incentives to push this adoption. “
The SEC did not name Azure’s CEO as a defendant, but Azure’s security filings show that the CEO at the time was Ranjit Gupta.
Mr. Gupta was charged by the Department of Justice with planning to violate the law prohibiting bribery. He did not immediately respond to a request for comment.
Azure said on Thursday that it is cooperating with the US investigation, and that the accused have left the company more than a year ago.
‘Suddenly GOOD LUCK’
In August 2021, Gautam Adani held the first of several meetings with an official in the southern state of Andhra Pradesh, to whom he allegedly promised a bribe of $228,000 in exchange for agreeing to the state’s power purchase, according to the judge. Charges of the Department.
By December, Andhra Pradesh had agreed to buy the power, and other states with smaller deals followed. Foreign officials were also promised bribes, US officials said.
At a December 6, 2021 meeting in a coffee shop, Azure executives reportedly discussed “rumors that Adanis somehow facilitated the signing” of the contracts, according to the SEC.
Gautam Adani said on December 14, 2021, the company was on track to “become the world’s largest renewable energy player by 2030.”
“The sudden fortunes of Azure and Adani Green caused speculation in the market about contract awards,” the SEC wrote in its complaint.
LETTER FROM SEC
Soon, the SEC began an investigation. The agency sent a “general inquiry” letter to Azure – which at the time was trading on the New York Stock Exchange – on March 17, 2022, asking about current contracts and whether foreign officials had sought anything of significance, according to the Department of Justice. crime.
According to the Justice Department, Gautam Adani told Azure representatives at a meeting in his Ahmedabad, India office next month that he expected to be reimbursed more than $80 million in bribes he paid to officials that helped secure Azure contracts.
Some Azure representatives and a leading investor in the company decided to pay Adani for allowing his company to take on a potentially profitable project. The agents and the investor allegedly agreed to tell Azure’s board of directors that Adani had solicited bribes, but hid their role in the scheme, prosecutors said.
All the while, Adani’s companies raised billions of dollars in loans and bonds through international banks, including from US investors. In four separate fundraising events between 2021 and 2024, the companies sent investors documents showing they had not paid bribes — statements prosecutors say are false and constitute fraud.
FBI SEARCH
During a visit to the United States on March 17, 2023, FBI agents seized Sagar Adani’s electronic devices. These agents gave him a search warrant from a judge that indicated that the US government was investigating violations of the Foreign Corrupt Practices Act.
According to prosecutors, Gautam Adani posted photographs of each page of the search warrant on March 18, 2023.
His companies went ahead with a $1.3 billion loan agreement on December 5, 2023, and another sale of secured notes in March 2024, and also provided investors with misleading information about their anti-bribery practices, according to prosecutors.
On October 24, federal prosecutors in Brooklyn obtained a secret grand jury indictment against Gautam Adani, Sagar Adani, Gupta, and five others allegedly involved in the scheme.
The case was released on November 20, which caused a decrease of 27 billion dollars in the market of Adani Group companies. Adani Green Energy immediately canceled the $600 million bond sale.
(Reporting by Luc Cohen in New York; Editing by Noeleen Walder and Sonali Paul)
