US prosecutors have brought charges against billionaire Gautam Adani and his nephew, Sagar Adani, along with several others, for their purported involvement in a $265 million (Rs 2,000 crore) bribery scandal aimed at securing solar power supply contracts in India. This development marks the second significant controversy for the edible oil-to-ports conglomerate in just 22 months, following allegations from short-seller Hindenburg Research.
Arrest warrants for both Gautam and Sagar Adani have been issued in the US, and prosecutors plan to deliver these warrants to international law enforcement agencies, as reported by Reuters, citing court documents.
On Wednesday, the US Department of Justice (DoJ) charged the Adani duo, former Adani Green CEO Vneet Jaain, and former executives from Azure Power and Canadian pension fund CDPQ with bribery related to power purchase agreements from five Indian states—Andhra Pradesh, Odisha, Chhattisgarh, Tamil Nadu, and Jammu & Kashmir—between 2020 and 2024.
They are also facing charges under the stringent Foreign Corruption Prevention Act (FCPA) because Adani raised funds through bonds from US investors, and Azure Power was previously listed on the NYSE. Additionally, the US Securities and Exchange Commission (SEC) has accused Gautam and Sagar Adani, along with Cyril Cabanes, a former Azure board director, of violating the FCPA.
The SEC claims they misled US investors by asserting they were not involved in bribery, while in reality, they were deeply engaged in paying or promising bribes amounting to hundreds of millions of dollars to gain undue influence over Indian government officials and secure contracts that benefited Adani Green.
The DoJ’s charges are criminal in nature, while those from the SEC are civil. The indictment filed in the US District Court for the Eastern District of New York alleges that the majority of the bribe—Rs 1,750 crore—was purportedly paid for contracts in Andhra Pradesh. The SEC’s separate complaint states that the payments occurred following a meeting between Gautam Adani and the then chief minister, Jagan Mohan Reddy, in August 2021.
According to the SEC, during or in connection with that meeting, Gautam Adani either paid or promised a bribe to Andhra Pradesh government officials to facilitate power supply agreements with the Solar Energy Corporation of India (SECI) for the procurement of 7,000 MW of power capacity, which was subsequently approved by the state cabinet.
While the indictment’s charges are merely allegations and the defendants are presumed innocent until proven guilty, the US Attorney’s Office for the Eastern District of New York has leveled five counts against them: 1) alleged conspiracy to violate the FCPA through bribery; 2) alleged conspiracy for securities fraud due to false or misleading statements made while raising funds; 3) wire fraud conspiracy related to a $1.4 billion syndicate loan raised in 2021; 4) alleged securities fraud during a bond issuance in 2021; and 5) conspiracy to obstruct justice by destroying and concealing evidence.
The bribery case revolves around contracts initiated in 2020, where Adani Green Energy (8 gigawatts) and Azure Power (4 gigawatts) were awarded PLI-linked projects to supply solar power to the Government of India-owned SECI, which was touted as one of the largest projects of its kind at that time.
However, as SECI struggled to secure buyers for the costly power, the two companies allegedly concocted a strategy to incentivize state power distribution companies in exchange for bribes. Court documents indicate that Gautam and Sagar Adani, along with Jaain, were directly involved in the alleged bribery scheme.
The documents further allege that Adani sought to recoup over Rs 600 crore paid on behalf of Azure Power, prompting Azure’s management to devise various schemes. Ultimately, they agreed to relinquish 2.3 GW of capacity with the understanding that the Adanis would acquire it, which eventually occurred.
