In a landmark legal development, US prosecutors have levelled serious corruption charges against Gautam Adani, chairman of the Adani Group, his nephew Sagar Adani, and six other individuals, alleging a sophisticated bribery scheme worth Rs 2,029 crore ($265 million) to secure solar power contracts in India.
Gautam Adani indicted in US Solar Power Bribery scandal
The indictment, which spans alleged bribes paid between 2020 and 2024, accuses the Adani Group of systematically corrupting Indian government officials to gain lucrative solar energy contracts. Critically, prosecutors claim these bribes were deliberately concealed from US banks and investors who had provided billions in funding for the solar energy project.
The timing of these allegations is particularly significant, coinciding with the damaging Hindenburg Research report from 2023 that triggered a staggering $150 billion loss in the Adani Group’s market value. The report had previously accused the conglomerate of stock manipulation and accounting fraud.
Here’s what US Prosecutors say:
According to the US indictment, Adani and his associates allegedly conspired to secure a contract to provide 12 gigawatts of solar power to the Solar Energy Corporation of India (SECI). However, a critical challenge emerged: SECI struggled to find buyers for the solar power, threatening the profitability of the entire project.
In response, prosecutors allege that the Adani Group and Azure Power devised a calculated bribery strategy. The plan involved offering substantial bribes to government officials to persuade state electricity distribution companies to enter into power supply agreements with SECI.
Gautam Adani also known as ‘The Big Man’?
The conspiracy reportedly involved elaborate communication strategies, including using coded language. Gautam Adani was referred to by code names like “Numero Uno” and “The Big Man” during encrypted messaging communications.
Leadership changes at the involved companies added another layer of complexity. Ranjit Gupta served as Azure Power’s CEO from 2019-2022, followed by Rupesh Agarwal from 2022-2023. Some executives involved in the project were reportedly asked to resign.
How does Adani turn schemes into bride payments?
The indictment reveals intricate schemes to disguise bribe payments, including options like transferring project parts or camouflaging payments as legitimate fees. Prosecutors quoted the defendants as “fabricating reasons for returning projects,” claiming litigation and economic challenges as cover.
A significant allegation suggests that the Adani Group deliberately withheld information from the US issuer’s board of directors about pre-existing bribe promises for securing Power Purchase Agreements (PPAs).
The legal action is notable because US law allows prosecution of corruption cases involving American investors or markets, even when the alleged bribes occur internationally.
This development represents a major escalation in the ongoing scrutiny of the Adani Group’s business practices. The indictment not only threatens the group’s international reputation but could potentially result in significant legal and financial consequences.
No response from Adani Group
The Adani Group has yet to issue a comprehensive response to these serious allegations. The case underscores the increasing global regulatory focus on corporate transparency and anti-corruption measures.
As the legal proceedings unfold, the international business community will be watching closely, recognizing the potential implications for corporate governance and investment practices in emerging markets.
