Gautam Adani indictment: A ‘bribery scheme’ to secure lucrative solar power contracts

Case against industrialist Gautam Adani and their business associates are represented by the US Department of Justice (DOJ) detailed allegations With respect to the procedures adopted by senior officials of Adani Green Energy Limited and Azure Power Global Limited (a renewable energy company headquartered at New Delhi(which used to be listed on the New York Stock Exchange) to bribe Indian government officials and secure lucrative solar power contracts.

Also read: Chairman of Solar Energy Corporation of India says there is no mention of wrongdoing by Solar Energy Corporation of India

The indictment begins by explaining the alleged motivation for resorting to the bribery scheme. Between December 2019 and July 2020, Azure Power and a subsidiary of Adani Green Energy won and were issued Letters of Award (LOAs) for manufacturing-linked solar tenders offered by the Solar Energy Corporation of India (SECI). Union Ministry of New and Renewable Energy whose mission is to increase the use of renewable energy in India.

SECI unable to find buyer

As part of this award, Azure Power and Adani Green subsidiaries will supply 4 GW and 8 GW of solar power respectively to SECI, which will purchase it at a fixed rate. In return, SECI had to find state electricity distribution companies (DISCOMs) that would buy this 12 GW of solar power. The award was, at the time, one of the largest solar power projects in the world. Azure Power projected to make after-tax profits of $2 billion over 20 years.

However, the “high energy prices” stipulated in the LOA made it impossible for SECI to find a buyer, thus jeopardizing the “lucrative LOA and associated revenues,” the indictment said.

As a result, “Gautam S. Adani, including Sagar R Adani (Gautam’s nephew and executive director of Adani Green Energy), Vineet S Jain (former CEO of Adani Green Energy), Ranjit Gupta (former CEO of Azure Power Global)… among others, have appointed the said officials as state discoms. Devised a scheme to offer, authorise, make and promise bribe payments to Government of India officials in exchange for entering into PSAs (Power Sale Agreements) with SECI.

The PSA will then allow Adani Green and Azure Power to secure PPAs (power purchase agreements) with SECI. It was agreed that Azure Power would “pay a portion of the promised bribe”.

The co-conspirators regularly discussed the progress of the plans on their mobile phones using “an electronic messaging application”.

Shri Gautam Adani personally met the “Foreign Official #1 in Andhra Pradesh” in August, September and November 2021. The “co-conspirators” promised to pay approximately ₹2,029 crore ($265 million) in bribes to Indian government officials. Of this, approximately ₹1,750 crore was offered to “Foreign Official #1” of Andhra Pradesh.

Discom response: From AP to Jammu and Kashmir

The bribery scheme started having an effect. Between July 2021 and February 2022, discoms entered into PSAs with SECI for the states and territories of Odisha, Jammu and Kashmir, Tamil Nadu, Chhattisgarh and Andhra Pradesh.

Additionally, “Andhra Pradesh’s power distribution companies entered into a PSA with SECI on or around December 1, 2021” following which the state “agreed to purchase approximately seven gigawatts of solar power, more than any other Indian state or territory.” This is the largest amount ever.”

Along with the PSA, between October 2021 and February 2022, Adani Green and Azure Power executed PPAs with SECI through subsidiaries. It was agreed that Azure Power would supply to SECI 650 MW of solar power for Chhattisgarh, Tamil Nadu, Odisha and Jammu and Kashmir (hereinafter “650 MW PPA”) and 2.3 GW for Andhra Pradesh (hereinafter “2.3 GW PPA”). Will do. Similarly, Adani Green’s subsidiaries also executed PPAs with SECI covering the same states and territories.

The indictment states that while this bribery scheme was unfolding, Mr. Sagar Adani was tracking “specific details of bribes paid and promised bribes to government officials” on his mobile phone.

These “bribe notes” systematically identified the state or territory for which bribes were offered to officials, the total amount of the bribe offered, and the amount of solar energy the state or territory agreed to purchase in exchange for the bribe. will be.

“The bribery notes also identify the per megawatt rate for the total amount of bribes proposed within each state or territory, the brief titles of the government officials who received the bribes, and/or the allocation of the total bribe amount among government officials. “

who will pay how much to whom

In the case Mr. Gautam Adani, Mr. Vineet S. Details of several meetings have been reported between Jain and “co-conspirators” to give their share of the bribe amount to Azure Power. “In anticipation of the meeting”, it said, “Jain used his cellular phone to photograph a document summarizing the amount owed by Azure Power to Adani Green for the relevant portion of the bribe”. .

Apparently, Azure Power owes Adani Green “₹55 crore for bribes promised to secure 650 MW PPA” and ₹583 crore for bribes promised to secure 2.3 GW PPA.

At one such bribery coordination meeting, Mr. Gautam Adani allegedly “presented several options” by which Azure Power could hide the satisfaction of its share of the bribe payment, including transfer of the 2.3 GW PPA to Adani Green or its subsidiaries. Doing was also included. To help Azure Power management decide “which corrupt payment option was best”, one of the alleged co-conspirators, former Azure Power CEO Rupesh Aggarwal, conducted “numerous analyzes using PowerPoint and Excel”. Prepared.

The options mentioned in Mr. Aggarwal’s PowerPoint presentation include: a. paying the dues to Adani Green directly to Gautam Adani, described as a “development fee”; B. Transferring all its PPAs to Adani Green; C. Transferring only 2.3 GW PPA to Adani Green; D. Launching a joint venture with Adani Green under which Adani Green will build and operate Azure Power projects; E. Transferring the 2.3 GW PPA to Adani Green and paying a “fee” of $7.5 million to Adani Green in respect of the 650 MW PPA, which Azure Power will maintain and develop.

‘Numero Uno’ and ‘Snake’ are being updated

Interestingly, while communicating about the alleged bribery scheme, the co-conspirators used code names, referring to Mr. Gautam Adani as “Mr. (.)A”, “Numero Uno” and “The Big Man”. , while mr. Jain was called “V”, “Snake” and “Numero Uno Minus One”.

The indictment alleges that the co-conspirators ultimately agreed that Azure Power would return the 2.3 GW PPA to SECI, with the understanding that Adani Green or its subsidiary would acquire it for itself, “thus Azure Power A portion of the bribery obligations will be fulfilled”.

Azure Power also agreed to pay Adani Green “its share of the bribe payments made (by Adani Green) to Indian Government officials – approximately $7 million – to secure the 650 MW PPA, allowing Azure Power It will be convenient to maintain the project.

Mr Aggarwal and other senior executives of Azure Power obtained board approval to return the 2.3 GW PPA to SECI by obscuring the true reasons for the move and citing the “worsening economy”. Around November 22, 2022, the board of directors of Azure Power authorized SECI to send a letter regarding withdrawal from the 2.3 GW PPA. On the same day, Mr. Sagar Adani reportedly sent an electronic message to Mr. Gautam Adani, stating that there was a board meeting where he was expected to approve the final letter to be sent to SECI. We will keep a close watch and pursue it properly.” Mr Gautam Adani reportedly replied, ”Okay”.

The original letter from Azure Power to SECI was sent on December 7, 2022. On December 8, Mr. Sagar Adani sent an electronic message to Mr. Gautam Adani, saying that Azure Power “has finally submitted the letter to SECI today…will be followed closely for next steps”. The indictment concludes from these exchanges that Adani was “secretly directing SECI to withdraw the 2.3 GW PPA”.

The alleged bribery scheme finally came to fruition on March 18, 2024, the day “SECI sent letter to (Azure Power) to terminate the 2.3 GW PPA, including reallocation of the 2.3 GW PPA to (Adani Green’s) subsidiary.” was authorized and development of 650 MW PPA was confirmed. Keep.”

While the alleged bribery scheme is a criminal act according to the US DOJ indictment, the US Securities and Exchange Commission (SEC) has alleged that during the same period a bribery scheme was allegedly in progress, “Adani Green embezzled $175 million from the US raised more investors and Azure Power’s stock was traded on the New York Stock Exchange”, in violation of anti-fraud provisions of the federal securities laws.