Gautam Adani.
Credit: PTI Photo
Bengaluru: The Adani group finds itself in fresh trouble after a court in New York, early on Thursday, indicted Gautam Adani and other senior executives on charges brought by US prosecutors, alleging that the billionaire was part of an elaborate scheme to pay bribes worth $265 million (Rs 2,029 crore) to Indian officials in various states to bag favourable terms for solar power contracts.
In a statement later in the day, Adani group denied the explosive allegations. However, the fallout from the issue is expected to be significant and will cause a reputational hit to the ports to cement conglomerate. It will also impact Adani’s ability to raise funds, especially from US markets. After the indictment, Adani scrapped a planned $600-million bond issue.
Gautam Adani and others charged by prosecutors, including nephew Sagar Adani, may be forced to restrict overseas travels.
The issue has also given the Opposition a political weapon to target the Modi government just ahead of the winter session of Parliament, which begins on Monday.
Shares of the 10 listed Adani group companies tanked on Thursday, with flagship Adani Enterprises dropping by more than 22% by the close of trading session. Cumulatively, investors in the listed Adani firms saw around $27 billion wiped off on the day.
Adani, India’s second-richest man, and seven others have been separately charged by the US Department of Justice and the Securities and Exchange Commission with paying bribes to unidentified officials of state governments in Andhra Pradesh and Odisha to buy expensive solar power, potentially earning more than $2 billion in profit over 20 years.
Prosecutors said the US started an investigation in 2022, and alleged that the group raised $2 billion in loans and bonds, including from US firms and investors, while giving false and misleading statements on the group’s anti-bribery practices and policies.
According to the indictment, Adani Green Energy, in 2021 won a tender to supply eight gigawatts of solar power to the state-owned Solar Energy Corporation of India. New Delhi-based Azure Power, whose officials too have been named along with former executives of Canadian public pension fund manager CDPQ in the case, won a similar 4 GW tender.
SECI failed to get buyers for the power at the prices contracted with Adani and Azure. Adani, in 2021 and 2022, personally met government officials and offered them bribes to sign power sale agreements with SECI, according to the US Attorney’s Office.
Following the promise of bribes, electricity distribution companies in Andhra Pradesh, Odisha, Tamil Nadu and Chhattisgarh entered into agreements with SECI.
The indictment alleges that Rs 25 lakh per megawatt was paid to an unnamed government official of the Andhra Pradesh, after which the state agreed to purchase 7 GW of solar power from SECI. Odisha purchased 500 MW of power through the same route.
The case documents have detailed how Sagar Adani allegedly used his mobile phone to track details of the bribes offered, while Adani Green Energy CEO Vneet Jaain used his phone to take a photograph of a document summarising Azure Power’s share of the bribes paid, amounting to over $80 million.
In WhatsApp exchanges during the formulation of the bribery scheme, the accused were referred to by code names - Gautam Adani was referred to as ‘SAG’ or ‘super aggregator’, ‘Numero uno’ and ‘The Big man’ while Jaain was ‘V’, ‘snake’ and ‘Numero uno minus one’.
The scheme was extensively documented by the defendants, according to prosecutors. One of the defendants, Rupesh Agarwal, also prepared analyses of the bribery scheme using PowerPoint and Excel that summarised various options for paying and concealing bribe payments, and he shared those analyses with other defendants.
“The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied… All possible legal recourse will be sought,” the group said in a statement later on Thursday.