America indicts Adani

New York/New Delhi: Billionaire Gautam Adani has been charged by US prosecutors for allegedly participating in an elaborate scheme to pay USD 265 million (about Rs 2,200 crore) in bribes to Indian officials in exchange for favourable terms for solar power contracts.

The bombshell allegations, which Adani group denied saying it is innocent until proven guilty, may have a widespread fallout ranging from reputational risk to the conglomerate, inability to raise funds from the US market and the billionaire being forced to restrict his overseas travels to opening a political pandora's box that will give the Opposition another tool to target the government just as Parliament meets for the winter session, starting Monday.

Adani, India's second-richest man, and seven others, including his nephew Sagar, have been charged by the US Department of Justice with paying bribes to unidentified officials of state governments in Andhra Pradesh and Odisha to buy expensive solar power, potentially earning more than USD 2 billion in profit over 20 years. Prosecutors said the US started an investigation in 2022. They alleged that the group raised USD 2 billion in loans and bonds, including from US firms, on the backs of false and misleading statements related to the firm's anti-bribery practices and policies as well as reports of the bribery probe.

According to the indictment, Adani Green Energy - the renewable energy arm of the group - in 2021 won a tender to supply 8 gigawatts of solar power to the government-owned Solar Energy Corporation of India. New Delhi-based Azure Power, whose officials too have been named along with former executives of Canadian public pension fund manager CDPQ in the case, won a similar 4 GW tender. SECI was unsuccessful in finding buyers for the power at the prices contracted with Adani and Azure.

Adani, in 2021 and 2022, met personally with government officials and offered them bribes to sign power sale agreements with SECI, according to the US Attorney's Office. Following the promise of bribes, electricity distribution companies in Andhra Pradesh, Odisha, Tamil Nadu and Chhattisgarh entered into agreements with SECI. The indictment alleges that Rs 25 lakh per megawatt was paid to an official of the Andhra Pradesh state government, after which the state agreed to purchase 7,000 MW (7 GW) of solar power from SECI. Odisha purchased 500 MW of power through the same route.