How Gautam Adani’s alleged bribery scheme took off and unravelled

NEW YORK – In June 2020, a renewable energy company owned by Indian billionaire Gautam Adani won what it called the single largest solar development bid ever awarded: an agreement to supply eight gigawatts of electricity to a state-owned power company.

But there was a problem. Local power players did not want to pay the prices the state company was offering, jeopardising the deal, according to US authorities. To save the deal, Mr Adani allegedly decided to bribe local officials to persuade them to buy the electricity.

That allegation is at

the heart of US criminal and civil charges

unsealed on Nov 20 against Mr Adani, who is not in US custody and is believed to be in India. His company, Adani Group, said the charges are “baseless” and that it will seek “all possible legal recourse”.

The alleged hundreds of millions of dollars in bribes

promised to local Indian officials

caught the attention of the US Justice Department and Securities and Exchange Commission (SEC) as Mr Adani’s companies were raising funds from US-based investors in several transactions starting in 2021.

This account of how the alleged scheme unfolded is drawn from federal prosecutors’ 54-page criminal indictment of Mr Adani and seven of his associates and two parallel civil SEC complaints, which extensively cite electronic messages among the scheme’s alleged participants.

In early 2020, the Solar Energy Corporation of India awarded Adani Green Energy and another company, Azure Power Global, contracts for a 12-gigawatt solar energy project, expected to yield billions of dollars in revenue for both companies, according to the indictment.

It was a major step forward for Adani Green Energy, run by Mr Adani’s nephew Sagar Adani. Up until that point, the company had earned only roughly US$50 million (S$67 million) in its history and had yet to turn a profit, according to the SEC complaint.

But the initiative soon hit roadblocks. Local state electricity distributors were reluctant to commit to buying the new solar power, expecting prices to fall in the future, according to an April 7, 2021, report by the Institute for Energy Economics and Financial Analysis, a think-tank.

Mr Sagar Adani and the Azure chief executive at the time discussed the delays and hinted at bribes on encrypted messaging application WhatsApp, according to the SEC.

When the Azure CEO wrote on Nov 24, 2020, that the local power companies “are being motivated”, Mr Sagar Adani allegedly replied: “Yup... but the optics are very difficult to cover.”

In February 2021, Mr Sagar Adani allegedly wrote to the CEO: “Just so you know, we have doubled the incentives to push for these acceptances.”

The SEC did not name the Azure CEO as a defendant, but Azure’s securities filings show the CEO at the time was Mr Ranjit Gupta.

He was charged by the Justice Department with conspiracy to violate an anti-bribery law.

Azure said on Nov 21 it was cooperating with the US investigations, and that the individuals involved with the accusations left the company before 2023.

In August 2021, Mr Gautam Adani had the first of several meetings with an official in southern state Andhra Pradesh, to whom he allegedly ultimately promised US$228 million in bribes in exchange for agreeing to have the state buy the power, according to the Justice Department’s indictment.

By December 2021, Andhra Pradesh had agreed to buy the power, and other states with smaller contracts soon followed. Other states’ officials were promised bribes as well, US authorities said.

During a Dec 6, 2021, meeting at a coffee shop, Azure executives allegedly discussed “rumours that the Adanis had somehow facilitated signing” of the deals, according to the SEC.

Mr Gautam Adani said on Dec 14, 2021, the company was on track “to become the world’s largest renewables player by 2030”.

The SEC wrote in its complaint: “The sudden good fortune for Azure and Adani Green prompted speculation in the marketplace about the contract awards.”

Before long, the SEC began to probe. The agency sent a “general inquiry” letter to Azure – which at the time traded on the New York Stock Exchange – on March 17, 2022, asking about its recent contracts and if foreign officials had sought anything of value, according to the Justice Department indictment.

According to the Department of Justice, Mr Gautam Adani told representatives of Azure during a meeting in his Ahmedabad, India, office the next month that he expected to be reimbursed more than US$80 million for the bribes he had paid officials that ultimately benefited Azure’s contracts.

Some Azure representatives and a leading investor in the company decided to pay him back by allowing his company to take over a potentially profitable project. The representatives and investor allegedly agreed to tell Azure’s board of directors that Mr Adani requested bribe money, but hid their role in the scheme, prosecutors said.

All the while, Adani’s companies were raising billions of dollars in loans and bonds through international banks, including from US investors. In four separate fund-raising transactions between 2021 and 2024, the companies sent investors documents indicating that they had not paid bribes – statements prosecutors said are false and constitute fraud.

During a visit to the US on March 17, 2023, Federal Bureau of Investigation agents seized Mr Sagar Adani’s electronic devices. The agents handed him a search warrant from a judge indicating that the US government was investigating potential violations of fraud statutes and the Foreign Corrupt Practices Act.

According to prosecutors, Mr Gautam Adani e-mailed himself photographs of each page of the search warrant on March 18, 2023.

His companies nonetheless went through with a US$1.36 billion syndicated loan agreement on Dec 5, 2023, and another sale of secured notes in March 2024, and once again furnished investors with misleading information about their anti-bribery practices, according to prosecutors.

On Oct 24, federal prosecutors in Brooklyn secured a secret grand jury indictment against Mr Gautam Adani, Mr Sagar Adani, Mr Gupta and five others allegedly involved in the scheme.

The indictment was unsealed on Nov 20, prompting a US$27 billion plunge in Adani Group companies’ market value. Adani Green Energy promptly cancelled a scheduled US$600 million bond sale. REUTERS