NEW YORK: In June 2020, a renewable energy company owned by Indian billionaire Gautam Adani won what it called the largest single solar development bid ever: an agreement to supply a state-owned energy company with 8 gigawatts of electricity.
But there was a problem. Local energy companies did not want to pay the prices offered by the state company, putting the deal in jeopardy, according to US authorities. To salvage the deal, Adani allegedly decided to bribe local officials to convince them to buy electricity.
The allegation is at the heart of US criminal and civil charges unveiled on Wednesday against Adani, who is not currently in US custody and is believed to be in India. His company, Adani Group, said the accusations were “baseless” and that it would seek “all possible legal recourses”.
Alleged bribes worth hundreds of millions of dollars promised to local Indian officials have caught the attention of the US Department of Justice and the Securities and Exchange Commission, as Adani companies have been raising money from US-based investors in several transactions starting in 2021.
This description of how the alleged scheme came to be derives from the 54-page criminal indictment filed by federal prosecutors of Adani and seven of his associates and parallel civil complaints with the Securities and Exchange Commission, which extensively cite emails between alleged participants in the scheme.
In early 2020, the Indian solar company awarded Adani Green Energy and another company, Azure Power Global, contracts for a 12-gigawatt solar project, expected to generate billions of dollars in revenue for both companies, according to the indictment.
It was a big step forward for Adani Green Energy, run by Sagar Adani, Adani’s nephew. Up to that point, the company had earned only about $50 million in its history and had yet to turn a profit, according to the SEC’s complaint.
But the initiative quickly ran into obstacles. Local electricity distributors nationwide have been reluctant to commit to purchasing new solar power, anticipating lower prices in the future, according to an April 7, 2021 report by the Institute for Energy Economics and Financial Analysis, a think tank.
Sagar Adani and Azure CEO at the time discussed the delays and insinuated there were kickbacks on the encrypted messaging app WhatsApp, according to the SEC.
When Azure’s CEO wrote on November 24, 2020, that local energy companies were being “incentivized”, Sagar Adani allegedly replied: “Yes… but it is very difficult to cover the optics. In February 2021, Sagar Adani allegedly wrote to the CEO “Just so you know, we’ve doubled the incentives to push for these admissions.”
The SEC did not name Azure’s CEO as a defendant, but Azure securities filings show that the CEO at the time was Ranjit Gupta.
The Justice Department charged Gupta with conspiracy to violate the anti-bribery law. He did not immediately respond to a request for comment.
Azure said on Thursday that it is cooperating with the US investigation, and that the individuals involved in the accusations left the company more than a year ago.