Adani Bribery case Highlights: Opposition demands JPC probe in Adani Group's dealings, to raise matter in winter session of Parliament

The Adani group’s indictment in the US over alleged bribery and fraud gave fresh ammunition to opposition parties to demand a joint parliamentary committee probe into the business group’s dealings, even as Congress leader Rahul Gandhi sought Gautam Adani’s immediate arrest. Addressing a press conference in New Delhi, Gandhi claimed that it is now pretty clear and established in the US that the businessman has broken Indian as well as American laws. Adani should be arrested immediately and interrogated while his “protector” and SEBI chairperson Madhabi Puri Buch should be removed from her post and a probe initiated, the Leader of Opposition in Lok Sabha said.

The Solar Energy Corporation of India (SECI) has refused to comment on CNBC TV18’s query regarding whether it will cancel its Power Purchase Agreement (PPA) with Adani Power after a US district court and the SEC (Securities and Exchange Commission) indicted Gautam Adani and other group executives on bribery charges related to certain solar energy contracts. Read more

The Securities and Exchange Board of India will consider stepping in the matter of a US federal court’s indictment of Gautam Adani and some other Adani Group officials for their alleged roles in a fraud scheme against US investors involving false statements and concealment of alleged bribery in state solar power projects only if cooperation is invoked under the inter-regulatory bilateral memorandum of understanding with the US Securities and Exchange Commission, a senior SEBI official said Thursday on the sidelines of an event in Mumbai.

The US SEC said in a press release Wednesday that it had charged Gautam Adani and Sagar Adani, in their capacity as officials of Adani Green Energy Ltd., “for conduct arising out of a massive bribery scheme”. Given the charge, SEBI will soon decide if its intervention is required under the inter-regulatory cooperation pact with the SEC, the official indicated. (Source: Informist)

The Left parties and the TMC on Thursday demanded an investigation into the allegations of bribery and fraud against Gautam Adani made by US prosecutors.

The billionaire industrialist has been charged by US prosecutors for allegedly being part of a scheme to pay over $250 million (about ₹2,100 crore) bribe to Indian officials in exchange for favourable terms for solar power contracts. This was concealed from the US banks and investors from whom the Adani group raised billions of dollars for the project, the prosecutors have alleged. US law allows pursuing foreign corruption allegations if they involve certain links to American investors or markets. The Adani group, however, have denied the charges. In a statement issued here, the CPI(M) said the Modi government “cannot hide behind a smokescreen anymore”, and demanded a CBI probe into the charges.

US District Court and the Securities & Exchanges Commission (SEC) have framed bribery charges against Gautam Adani and other executives of the group. While Adani has categorically denied these accusations, calling them “baseless” and vowing to pursue all legal remedies, the developments have already caused ripples, leading to the cancellation of Adani Green Energy’s US dollar-denominated bond sale. Read more

Kenyan President William Ruto said on Thursday he had ordered the cancellation of the procurement process to expand the country’s main airport, in which the government was considering a proposal by India’s Adani Group.
Ruto said he had also directed the cancellation of a more than $700 million deal the energy ministry had signed with a unit of the Adani Group to construct power transmission lines.

Electricity Minister V Senthil Balaji on Thursday asserted that the Tamil Nadu government-run electricity corporation has no commercial relationship with Gautam Adani’s company and that the state has an agreement to buy power only from a central government firm. The minister, speaking to reporters here, said he noticed references to states including Tamil Nadu in some news reports and social media posts regarding industrialist Gautam Adani, who has been charged in the US regarding solar power contracts. “I would like to first clarify that as regards TANGEDCO (TN Generation and Districution Corporation), there has been no kind of commercial relationship with Adani’s company during the past three years (after the DMK assumed power in May 2021),” he said.

Azure Power Global Ltd has responded to the charges filed by the US Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) against a former board member, Cyril Cabanes. “We are aware of the actions announced by the US Department of Justice and U.S. Securities & Exchange Commission against certain former directors and officers of Azure, as well as certain third parties,” the company said in a statement exclusively to CNBC-TV18. Read more

Adani Group stocks are trading with losses between 10% to 25% after the US district court and the SEC, indicated Gautam Adani and other group executives on bribery charges. These charges pertain to certain solar energy contracts. Here is a look at the turn of events that shaped up between the Adani Group, the US issuer, and the Solar Energy Corporation of India (SECI), as per the court order. Read more

State Bank of India
ICICI Bank
Axis Bank
Yes Bank
IndusInd Bank
IDFC First Bank
Bank of India
RBL Bank
Central Bank of India
Union Bank of India
REC
IDBI Bank

#1 Conspiracy to violate the FCPA

#2 Securities Fraud Conspiracy

#3 Wire Fraud Conspiracy

#4 Securities Fraud – the 2021 144A Bond

#5 Conspiracy to Obstruct Justice

A timeline of events that transpired between the Adani Group, Azure and Solar Energy Corporation of India (SECI).

The Adani Group stocks erased a market capitalisation of more than ₹2 lakh crore, stocks fall 7-23%

• We are aware of the actions announced by the U.S. Department of Justice and U.S. Securities & Exchange Commission against certain former directors and officers of Azure, as well as certain third parties
• As we initially disclosed in January 2023 and in subsequent filings and annual reports, we have been cooperating with those agencies in relation to those and other matters and we will continue to do so
• The former directors and officers of Azure referenced in the U.S Department of Justice and U.S. Securities and Exchange Commission actions have been separated from Azure for more than a year
• Azure is committed to operating with strong governance standards in its mission to provide clean energy solutions.
• We have no further comment at this time

“The fact of the matter is that the Adani Group is now highly restricted, I suspect, in terms of its international expansion and raising money overseas. There were already some whispers and questions about them after the Hindenburg thing. As it is, foreign investment in the Adani Group was relatively limited for a group that size in India. And with this, I do not think they can raise any money overseas for a long time. And the Kenya and the Bangladesh operations that they have were in trouble and are going to be in more trouble. One thing to understand that with China down, the India story is one of the pillars left for people to get excited about right now from a global investor community and suspect that now with this, there is always been a general weariness among foreign investors about the quality of Indian corporate governance and the institutions that are in charge of regulating them, and this cannot help that story.”

• Defendants will have to now interact with US authorities on the court proceedings
• US Court and SEC could summon more witnesses from India and the US
• Accused have the option of submitting themselves to the court’s jurisdiction or challenging it
• The accused can try to settle the case but that will involve a high settlement fine
• Accused can try to contest the orders and in that case the trial will begin
• While determining the fine or settlement amount the US court and SEC will consider the amount of bribe given in India and amount of capital raised by the accused persons in the US for the solar projects in India
• The foreign extortion prevention act which has also been invoked in this case allows US prosecutors to move against government officials as well

• Defendants will have to now interact with US authorities on the court proceedings
• US Court and SEC could summon more witnesses from India and the US
• Accused have the option of submitting themselves to the court’s jurisdiction or challenging it
• The accused can try to settle the case but that will involve a high settlement fine
• Accused can try to contest the orders and in that case the trial will begin
• While determining the fine or settlement amount the US court and SEC will consider the amount of bribe given in India and amount of capital raised by the accused persons in the US for the solar projects in India
• The foreign extortion prevention act which has also been invoked in this case allows US prosecutors to move against government officials as well

In this regard, we understand that the United States Department of Justice and the United States Securities and Exchange Commission have issued a criminal indictment and brought a civil complaint, respectively, in the United States District Court for the Eastern District of New York, against Shri Gautam Adani, as well as two other Board members of Adani Green Energy Limited.

• ’No Basis’ To Investigate Matter w.r.t Charges On Adani Group
• Haven’t Got Any Docs Over Charges By U.S.
• Not Clear If Any Of Solar Energy Corp’s ‘Covenants’ Have Been Violated

The Spokesperson of Adani Group states that the allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied.

As stated by the US Department of Justice itself, “the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.” All possible legal recourse will be sought.

The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations. We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws.

A timeline of events that transpired between the Adani Group, Azure and Solar Energy Corporation of India (SECI). 

Definitely stay out of groups or stocks which have corporate governance issues. Second, many long only funds would shy away from this because of the reputation from taking positions or would unwind positions. Third, even project financing for Adani Group will become very difficult, and so, because they have announced a slew of projects for them to raise funding from many agencies or many investors or banks, could become difficult if these statistics and the reputation issue, and the cost of borrowing will also increase phenomenally for them at least 200 to 300 basis points, I would think.

#1 Conspiracy to violate the FCPA

#2 Securities Fraud Conspiracy

#3 Wire Fraud Conspiracy

#4 Securities Fraud – the 2021 144A Bond

#5 Conspiracy to Obstruct Justice

The US District Court Order States:

– US issuer and Indian Energy co’s subsidiary won and were issued LoAs for mfg-linked solar tender offer by Solar Energy Corp

– US issuer agreed to supply 4 GW of solar power to SECI

– Indian Energy co’s subsidiary agreed to supply 8 GW of solar power to SECI

– SECI was responsible to finding state electricity distribution cos that would purchase the 12 GW power supplied

– Terms of LoAs and amended LoAs obligated SECI to purchase solar power from both entities at a fixed rate

– At the time of the award, size and scope of the project was among the largest global solar energy projects