Why has Gautam Adani been indicted in the U.S. over alleged $250mn bribery scheme? | Explained Premium

Gautam Adani and his associates have been accused of paying more than $250 million in bribes to obtain lucrative solar energy contracts. What are the charges and what happens next?

The story so far: Federal prosecutors in New York on Wednesday (November 21, 2024) indicted Adani Group Chairman Gautam S. Adani, his nephew Sagar Adani, and six others on multiple counts of fraud. The charges stem from an alleged multibillion-dollar scheme to bribe Indian officials in exchange for favourable terms on solar power contracts, which were projected to generate over $2 billion in profits.

“This indictment alleges schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice,” a press release issued by the US Attorney’s Office, Eastern District of New York, said quoting U.S. Deputy Assistant Attorney General Lisa Miller.

The individuals named as defendants, alongside Gautam Adani and his nephew Sagar Adani, include Vneet Jaain, CEO of Adani Green Energy Ltd; Ranjit Gupta, who served as CEO of Azure Power Global Ltd from 2019 to 2022; Rupesh Agarwal, who was with Azure Power from 2022 to 2023; and Cyril Cabanes, an Australian-French dual citizen, along with Saurabh Agarwal and Deepak Malhotra — all of whom were affiliated with the Canadian institutional investor CDPQ.

The indictment alleges that Gautam Adani and his associates paid over $250 million in bribes to Indian government officials between 2020 and 2024. These payments were reportedly made to secure contracts projected to generate $2 billion in profits over 20 years and to develop India’s largest solar power plant project.

The U.S. prosecutors have claimed that the seeds of the bribery scheme were sown between December 2019 and July 2020 when Adani Green Energy and another renewable energy company listed on the New York Stock Exchange secured contracts from the Solar Energy Corporation of India, a state-owned entity dedicated to promoting renewable energy adoption across the country. At the time, Adani Green Energy proclaimed in a press statement that it had won “the world’s largest solar award”.

According to the indictment, the $6 billion investment was projected to yield over $2 billion in post-tax profits over 20 years. However, the project encountered an unexpected setback —its high energy costs made it unaffordable for Indian States, leaving the Solar Energy Corporation of India grappling to attract customers to sign on.

Between 2021 and February 2022, several States including Odisha and Jammu and Kashmir agreed to participate in the solar power initiative. Around the same time, more individuals joined the bribery scheme, including former employees of CDPQ — Cyril Cabanes, Saurabh Agarwal and Deepak Malhotra.