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Adani Group Accused of Paying $250 Million in Bribes to Secure Solar Energy Contracts

• ByStartupStory     |    November 22, 2024

Billionaire Gautam Adani and his associates have been accused of orchestrating a scheme to pay over $250 million in bribes to Indian government officials between 2020 and 2024, allegedly to secure lucrative solar energy contracts on favorable terms. These charges, brought forth by US prosecutors, claim the bribes were used to win contracts that could generate more than $2 billion in profit for the Adani Group.

The defendants include Gautam Adani, the Chairman of the Adani Group, his nephew Sagar R Adani, an executive director at Adani Green Energy Ltd, and the former CEO of Adani Green, Vneet Jaain. The charges are related to securities fraud, securities fraud conspiracy, and wire fraud conspiracy. The US Securities and Exchange Commission (SEC) also filed a civil case against the Adanis.

Breon Peace, US Attorney for the Eastern District of New York, stated, “The defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars.”

The charges are part of a broader investigation, which also implicates three former employees of a major Canadian pension fund, CDPQ, for obstructing the investigation into the bribery by deleting emails and providing false information to US authorities. CDPQ is a shareholder in Adani companies and has invested in infrastructure projects linked to the alleged scheme.

According to the indictment, the bribes were concealed from US banks and investors from whom the Adani Group raised billions of dollars for its solar energy projects. The US authorities are pursuing these foreign corruption allegations due to the involvement of American investors and markets.

This development comes as a blow to the Adani Group, which had just recovered from the fallout of the January 2023 allegations from US short-seller Hindenburg Research. The research firm accused the Adani Group of “brazen stock manipulation and accounting fraud,” leading to a $150 billion wipeout in market value at its lowest point. However, the conglomerate has since seen a recovery in its stock prices.

Gautam Adani, who founded the Adani Group in 1988 as a commodities trading firm, has expanded the conglomerate into diverse sectors, including ports, energy, and mining. The group’s renewable energy arm, Adani Green Energy Ltd, was central to the alleged scheme.

US authorities also revealed that, on March 17, 2023, FBI agents approached Sagar Adani in the United States. They executed a search warrant and took custody of electronic devices linked to him. Documents revealed that certain conspirators used code names like “Numero uno” and “the big man” to refer to Gautam Adani.

The charges indicate that the bribe money was used to secure favorable terms for one of the world’s largest solar energy projects. The US Attorney’s Office for the Eastern District of New York has unsealed criminal charges against several individuals connected to Adani Green and Azure Power, a US-listed solar power company allegedly involved in the bribery scheme.

Ranjit Gupta and Rupesh Agarwal, former CEO and former Chief Strategy and Commercial Officer of Azure Power Global, respectively, have also been criminally charged. They face allegations of violating federal securities laws and could face permanent injunctions, civil penalties, and director bans.

During the course of the alleged scheme, Adani Green Energy raised more than $175 million from US investors. Azure Power’s stock was also traded on the New York Stock Exchange, making it subject to US securities laws, according to the SEC.

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