While a mere allegation so far, US prosecutors and regulators portray a story of the intersection of an Indian billionaire, green schemes, state contracts, power sector finances, and bribes.The US Department of Justice has indicted Gautam Adani, the founder of Adani Group, his nephew Sagar Adani, and other senior Adani Green executives for allegedly bribing or offering bribes to the tune of $265 million to Indian state government officials to get them to sign solar power contracts, while raising money for the same projects in the US by promising that the company abided by anti-bribery laws. This constitutes fraud under US federal securities law and, if proven, may invite criminal liabilities.
The US case rests on the premise that Adani Green bribed government officials in Odisha and Andhra Pradesh, and possibly Tamil Nadu, Chhattisgarh, and Jammu and Kashmir (J&K), to get their power distribution companies (discoms) to commit to purchasing solar power at above market rates. The timeline of the alleged bribes is from the middle of 2021 to the end of 2021. Biju Janata Dal, YSR Congress, DMK, and Congress governed four of the states mentioned, while J&K was effectively under central BJP rule.
Adani group denied the allegations as baseless and said it is fully compliant with all laws.
In the charges unsealed on Wednesday evening Eastern time, the US attorney’s office for the Eastern District Court of New York alleged that between 2020 and 2024, senior executives of Adani Green and associated entities “conspired to misrepresent the company’s anti-bribery practices” to US investors and international financial institutions. The indictment added that Adani and others also “concealed” from the same investors their bribery of Indian government officials to obtain billions of dollars of financing for green energy projects”, including the “corrupt solar energy supply contracts” for which they were raising funds.
The US Security and Exchange Commission (SEC) has, in parallel, filed a complaint against Adani and his nephew, Sagar, the executive director of Adani Green, “for conduct arising out of a massive bribery scheme”. This allegedly involved “paying or promising to pay the equivalent of hundreds of millions of dollars in bribes to Indian government officials to secure their commitment to purchase energy at above-market rates” while raising $175 million from US investors in the same period, based on “materially false and misleading” statements.
If proven, the charges may invite financial penalties and a bar on the defendants from serving as directors or officers in companies that fall under US exchange regulations.
