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The U.S. Department of Justice (DOJ) has issued a five-count criminal indictment of Gautam Adani, chairman of the Adani Group, and several of his business associates. The charges include promising more than $250 million in bribes to Indian government officials to secure solar energy contracts, conspiracies to commit securities and wire fraud, and orchestrating “a multi-billion dollar scheme” to defraud U.S. investors and global financial institutions by giving “false and misleading statements”. The indictment was unsealed by the U.S. Attorney’s Office for the Eastern District of New York late on November 20. In a parallel move, the U.S. Securities and Exchange Commission (SEC) has also charged Mr. Gautam Adani and Sagar Adani (the former’s nephew and head of Adani Green Energy), along with Cyril Cabanes, a top executive of Azure Power Global Ltd. (a New Delhi-headquartered renewable energy company that used to be listed on the New York Stock Exchange), with a massive bribery scheme involving Adani Green and Azure Power. In the U.S., it is illegal to make payments to foreign government officials in a bid to obtain or retain business. Raising money by misleading investors about key corporate governance decisions and hiding the authorisation of bribery practices in company reports are also treated as offences. While the DOJ indictment constitutes a criminal case, the SEC’s is a civil complaint, and if proved, could result in a “permanent injunction, a civil penalty, and an officer and director bar”. The SEC’s complaints were filed in the U.S. District Court for the Eastern District of New York. Reacting to the news of the indictment, Adani Green Energy Ltd. said on Thursday it was withdrawing a proposed $600-million bond issue. Shares of Adani Group companies lost about $27 billion in market value in the domestic markets, led by an over 23% decline in its flagship, Adani Enterprises Ltd. This was the steepest drop in its share value since February 2023, when it was hit by allegations of misdemeanour and corporate malfeasance levelled by U.S.-based Hindenberg Research. The Adani Group denied the allegations of the U.S. Department of Justice and the SEC, terming them “baseless”. In a statement, a spokesperson for the conglomerate said, “As stated by the U.S. Department of Justice itself, ‘the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.’ All possible legal recourse will be sought. The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations.”Senior Congress leader Jairam Ramesh said that the U.S. indictment vindicated the demand that the Congress was making for a Joint Parliamentary Committee investigation into the various alleged scams.
The indictment concerns the actions of the defendants between 2020 and 2024. The defendants are Mr. Gautam Adani; Mr. Sagar Adani, Executive Director of Adani Green Energy; Vneet S Jaain, former CEO of Adani Green Energy; Ranjit Gupta, former CEO of Azure Power Global; Mr. Cyril Cabanes, a former managing director at CDPQ, a Canadian pension fund which is also a majority stockholder of Azure Power; Saurabh Agarwal, former managing director of CDPQ India; Deepak Malhotra, former executive of CDPQ, and Rupesh Agarwal, former CEO of Azure Power. Under the U.S.’s Foreign Corrupt Practices Act, 1977 (FCPA), it is unlawful to make payments to foreign government officials in a bid to obtain or retain business. It is also a criminal offence to raise money by misleading investors about key corporate governance practices, which this case concerns compliance with the FCPA. Further, it is unlawful to obstruct federal investigations by giving false information and destroying evidence such as electronic communications. It is also a separate offence to hide the authorisation of bribery practices in company annual reports. The defendants have been charged with offences on all these counts. The indictment also charges the defendants with obstructing a Federal Bureau of Investigation (FBI) probe by falsely denying their participation in the bribery scheme to FBI agents. Mr. Sagar Adani came to know of the FBI investigation, as well the people under the FBI scanner when, in March 2023, FBI agents in the U.S. served him a copy of a search warrant and took possession of his electronic devices. The search warrant clearly “identified offences, individuals and entities under investigation” and mentioned the violations of the FCPA, securities fraud, wire fraud and related conspiracies involving Mr. Gautam Adani and Adani Green Energy. And yet, subsequently, Gautam and Sagar caused others to make false and misleading statements regarding their awareness and knowledge of the United States government’s investigation and its subjects, which enabled them to raise a dollar-denominated syndicate loan of $1.36 billon for Adani Green. According to the indictment, starting in 2020, the defendants authorised and collaborated on a scheme to pay over $250 million in bribes to Indian government officials in order to secure solar power purchase contracts for Adani Green Energy and Azure Power from Solar Energy Corporation of India (SECI), a company of the Union Ministry of New and Renewable Energy, whose mission is to increase use of renewable energy in India. The U.S. DoJ indictment has alleged that the Adanis resorted to a bribery scheme because the SECI was unable to find buyers among State distribution companies (discoms) for the Adanis’ solar power, whose price was above market rates. But many State discoms did subsequently sign sale agreements with the SECI to buy the Adanis’ more expensive renewable power. The indictment notes that “following the promise of bribes to Indian government officials…between July 2021 and February 2022, electricity distribution companies for the States and regions of Odisha, Jammu and Kashmir, Tamil Nadu, Chhattisgarh and Andhra Pradesh entered into PSAs [Power Sale Agreements) with the SECI”. Tamil Nadu Electricity Minister V. Senthilbalaji on Thursday said that there was no commercial link between the Tamil Nadu Generation and Distribution Corporation (Tangedco) and the Adani Group companies in any manner. “I make it clear that as far as the Tamil Nadu Electricity Board was concerned, there was no commercial link with the Adani group of firms over the last three years. There was no link whatsoever with the Adani Group in any manner,” he insisted. In Andhra Pradesh, the YSR Congress Party central office, Tadepalli, Guntur, through a release, denied the allegations. It stated that the Andhra Pradesh government received an offer from SECI to supply 7,000 MW of power at the lowest discovered tariff of ₹2.49 per kWh. The statement said that the power procurement was approved by the Andhra Pradesh Electricity Regulatory Commission through its order dated November 11, 2021. Then, an agreement was signed between SECI and A.P. Discoms. This was after the Central Electricity Regulatory Commission’s nod as well. “It is necessary to mention that SECI is a Government of India enterprise. There is no direct agreement between AP DISCOMs and any other entities including those belonging to the Adani Group,” it said. Elsewhere, experts cautioned Sri Lanka to be ‘vigilant’ about a power deal with the Adani Group; and in Kenya, the government cancelled multimillion-dollar airport expansion and energy deals with Mr. Gautam Adani’s firms. President William Ruto, in a state of the nation address, said the decision was made “based on new information provided by our investigative agencies and partner nations”. The indictment of Gautam Adani and several top officials of the Adani conglomerate in the U.S. may become a factor in future negotiations between the Adani Group and the interim government in Bangladesh, energy experts in Dhaka said. The High Court in Dhaka has already ordered a probe into the 1,600-megawatt power deal that allowed the Adani Group to export electricity from its Godda power plant to Bangladesh.