The country’s veteran businessman Gautam Adani is surrounded by new allegations. The allegation is of bribery of approximately Rs 2.25 billion to Indian officials to obtain contracts for solar energy projects in India. Adani Group had raised funds for these projects from American investors, which is why this case has come against them in the American courts. The group was expected to make about $2 billion in profits from these projects over 20 years.
The main players in this whole matter are Gautam Adani, Chairman and Founder of Adani Group, Sagar Adani, CEO of Adani Green Energy, Ranjit Gupta, CEO of Azure Power, Rupesh Aggarwal, Advisor to Azure Power, a US issuer. According to the US indictment, Adani Group and the US issuer had won a contract to supply 12 gigawatts of solar energy to the state-owned Solar Energy Corporation of India (SECI), but SECI could not find buyers in India to purchase the solar energy. . The deal could not be carried out without buyers and both companies risked huge losses. Therefore, Adani Group and Azure Power offered bribes to Indian government officials.
SEC allegation, corruption began from 2021
The US Securities and Exchange Commission (SEC) has charged Adani Green Energy Limited founder Gautam Adani and his nephew Sagar Adani with paying bribes worth hundreds of millions of dollars and withholding information about them from investors.
The SEC says that during the $750 million bond offering, Gautam Adani and Sagar Adani had represented to investors that their company was free of corruption and that Adani Green officials had never been involved in bribery. The SEC has said in its complaint that these claims were false.
According to the SEC, Gautam Adani and Sagar Adani offered huge bribes to Indian state government officials to secure a contract for a large solar energy project in India. Another company, Azure Global Power Limited, which had agreed to pay its share of the bribe, was also involved in this case. The SEC claims that Gautam Adani and Sagar Adani also played a role in recovering the bribe amount from Azure.
What are the allegations in the charge sheet?
In 2014, the Indian government announced that it wanted to reach 175 gigawatts of renewable energy capacity by 2022, of which 100 gigawatts would come from solar energy. The Solar Energy Corporation of India (SECI) had called for a special tender in which companies were to set up 3 gigawatt (GW) solar power generation capacity in India. In exchange, SECI would have signed an agreement to purchase 12 GW of solar energy from these companies.
This entire project had a solar energy capacity of 15 GW, which was named ‘Manufacturing Linked Projects’. Adani Green and Azure Power participated in this tender and eventually both companies were awarded the contract. Azure promised 1 GW of manufacturing capacity and 4 GW of power supply, while Adani Green promised 2 GW of manufacturing capacity and 8 GW of supply.
In 2020, Adani Green claimed that the project would take them to a total capacity of 15 GW and make the company the world’s largest renewable energy company by 2025. But there was a big problem here. In the ‘Award Letter’ issued by SECI, it was made clear that SECI does not guarantee the purchase of energy to companies. This required the consent of the state governments.
When the SECI attempted to negotiate agreements with state governments and their electricity distribution corporations (DISCOMs) to purchase power, many states rejected the terms. These states said that the power prices offered by Adani Green and Azure Power were higher than the market rate. But after this, Gautam Adani and Sagar Adani themselves took charge.
Sagar Adani is alleged to have conspired with Azure Power officials to give “incentive money” (i.e. bribes) to influence DISCOMs of Indian states. Officials in the state of Odisha were allegedly offered bribes worth millions of dollars to purchase 500 megawatts (MW) of power. At the same time, a bribe of $200 million was offered to purchase 7,000 MW of power from Andhra Pradesh DISCOMs. The full details of these bribes are recorded in Adani Green’s internal records. It was also reported how much was offered to which state and through whom.
Finally, SECI signed power purchase agreements (PSAs) with four states including Odisha and Andhra Pradesh. Through these agreements, SECI paved the way to sell power to DISCOM between July 2021 and December 2021. Following this, SECI signed power purchase agreements (PPAs) with Adani Green and Azure Power.
Meanwhile, Adani Green raised $750 million through ‘Green Bonds’ in the international market. Investors were told that this amount would be used in “green projects” and that the company follows anti-corruption policies. But the truth was different from this. Adani Green hid from its investors that its largest project (Manufacturing Linked Projects) was acquired through corrupt means.
SEC complaint
In 2022, SECI (Solar Energy Corporation of India) and several Indian state governments signed power supply agreements for large solar energy projects. In this, Adani Green got two-thirds of the projects and Azure got one-third. The SEC says that between 2022, Gautam Adani, Sagar Adani and Adani Green CEO Vineet Jain met with Azure executives several times. In these meetings, Gautam Adani alleged that he had given bribes to state governments in India in 2021. In return, there was talk of recovering one-third of the bribe amount from Azure.
Hidden corporate transactions to pay bribes
The SEC claims that Gautam Adani advised Azure to pay for its stake through hidden corporate transactions. Under this, Azure transferred the rights of its largest project, 2.3 GW power supply in Andhra Pradesh, to Adani Green. Azure wrote letters to SECI in December 2022 and February 2023 saying that the Andhra Pradesh project is not economically viable. But the SEC says this was just a pretext for Azure to transfer the project to Adani Green.
In December 2023, Adani Green announced that it had signed a power purchase agreement with SECI for a majority stake in the Andhra Pradesh project. The SEC says Azure took this step to pay its share of the bribe to the Adani Group.
The SEC has leveled four main allegations against Adani Group and Azure:
1. Violation of the Securities Act, Section 17(a)
2. Violation of Section 10(b) and Rule 10b-5 of the Exchange Act
3. Adani Green accused of “aiding” in these violations
4. Repeatedly accused of executing “fraudulent schemes”
On what basis did the SEC bring the case?
The SEC has registered a case against Gautam Adani and Sagar Adani under Section 17(a) of the Securities Act, 1933 and Section 10(b) of the Securities Exchange Act, 1934. Apart from this, it also alleged a violation of Rule 10b-5. The SEC has warned that if the pair are not stopped, they may do similar things in the future. He has applied to the court to ban him forever from working in any position in public companies. A heavy fine should be imposed on both companies. This matter is currently in court and the SEC has demanded a jury trial on the matter.
What did Adani Group say to clarify…?
Adani Group said in clarification that these allegations are baseless. However, these are only accusations, the accused is considered innocent until proven guilty. All possible legal measures will be taken. Adani Group has always maintained and will continue to maintain transparency and compliance with regulatory standards across all sectors. We assure our shareholders, partners and employees working in the group companies that we are a law-abiding organization that fully complies with all laws.
Adani Group said in its statement that the US Department of Justice and the SEC issued an indictment in the US District Court for the Eastern District of New York against members of our board of directors Gautam Adani and Sagar Adani. The US State Department of Justice has also included our board member Vineet Jain. In light of these developments, our subsidiaries have decided not to proceed with the proposed dollar-denominated bond offerings at this time.
Introduction to Adani Green and Adani Group
Gautam Adani founded the Adani Group in 1988. This group is one of the largest conglomerates in India today and operates in many sectors such as power, ports, airports and coal trading. In 2015, Gautam Adani and his brother Rajesh Adani founded Adani Green Energy Limited, the renewable energy arm of Adani Group. This company builds and manages large-scale solar and wind energy projects in India.
Sagar Adani’s role
Sagar Adani, nephew of Gautam Adani. He became CEO of Adani Green’s board of directors in 2018, at the age of 24. He is also the chairman of the company’s Management Committee and oversees the company’s strategy and projects.
Adani Green: Journey from the beginning to now
as of 2015
Gautam Adani and his brother Rajesh Adani founded Adani Green Energy Limited in January 2015. Initially, this company was private and owned by the family trust of Gautam Adani and Rajesh Adani.
It became a public company in 2017.
Adani Green became a public company in December 2017 and its shares were listed on the BSE (formerly Bombay Stock Exchange) and the National Stock Exchange of India (NSE) in June 2018.
adani family control
The Adani family has had a great influence on this company from the beginning. As of June 2021, Gautam Adani, Rajesh Adani and their families controlled 57.47% of the company’s shares. This means they have full control over appointing the board of directors, setting policies, and other important decisions.
I dream of becoming the largest solar energy company in the world
Adani Green has set the goal of becoming the world’s largest private company in solar energy production. The company has claimed to achieve this goal by 2025 and become a leader in renewable energy by 2030. The company started in 2016 with a power generation capacity of only 20 megawatts (MW). At the end of 2018, it increased to about 2,000 MW.
Big plans for 2019
In 2019, Adani Green announced that it planned to develop 10 gigawatts (GW) of power generation capacity by 2022. This is five times more than in 2018. Adani Green has always described itself as a responsible company in its annual reports and other documents. They claimed to follow environmental, social and governance (ESG) principles.
Anti-corruption and ethics
In 2019, the company formed a Corporate Social Responsibility Committee and implemented the Code of Conduct and Business Ethics Policy. He stated that his policies are in line with the principles of the World Bank and the International Labor Organization. In 2019, Adani Green announced its accession to the United Nations Global Compact. This initiative included commitments to work for human rights, labor, the environment and corruption.
Steps 2020 and 2021
In 2020, Adani Green published its first Integrated Annual Report, in which it mentioned its anti-corruption efforts. In August 2021, the company published an ESG Report. In this he called for a policy of zero tolerance and “strong corporate governance.”
