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Massive $250 million bribery scheme exposed in $6 billion solar power deal, leading to major indictment

After rebounding from allegations of stock manipulation and fraud leveled by American short-seller Hindenburg Research, the Adani Group, led by billionaire Gautam Adani, faced another significant setback. U.S. prosecutors have accused Adani of involvement in a $250 million bribery scheme, delivering a substantial blow to the conglomerate's recovery efforts.

The accusations caused Adani Group stocks to plummet by as much as 20% on Thursday. Prosecutors claimed the defendants orchestrated a scheme to funnel over $250 million in bribes to Indian government officials while raising funds from U.S. investors. This development marks a severe setback for the conglomerate, further intensifying scrutiny of its operations.

Mega Adani deal that has landed in controversy

According to a report by The New York Times, U.S. prosecutors have revealed that the groundwork for the alleged bribery scheme involving Adani was laid between December 2019 and July 2020. During this period, Adani Green Energy, along with another renewable energy company listed on the New York Stock Exchange, secured contracts from the Solar Energy Corporation of India (SECI). SECI, a state-owned entity, aims to expand renewable energy usage across the country.

The report highlighted that Adani Green Energy had announced winning "the world's largest solar award" at the time. The deal involved a $6 billion investment in solar energy projects, projected to generate over $2 billion in profits after taxes over two decades, as per the indictment. However, the unintended consequence was the high cost of energy for Indian states, leading to challenges for SECI in finding customers. Prosecutors allege that Adani and his associates used bribes to persuade Indian states to adopt their solar energy solutions.

In June 2020, Adani Green Energy Limited declared its acquisition of a groundbreaking manufacturing-linked solar agreement with SECI. The agreement committed Adani Green Energy to develop 8 GW of solar projects and establish an additional 2 GW of solar cell and module manufacturing capacity. This project represented a ₹45,000 crore ($6 billion) investment, expected to create 400,000 direct and indirect jobs and reduce 900 million tonnes of carbon dioxide emissions over its lifespan, according to a company statement.

The company described the award as a pivotal milestone, aligning with India’s Atma Nirbhar Bharat Abhiyan (Self-Reliant India Program) and the nation’s leadership in combating climate change. The initiative also reflected India’s commitment made at the COP21 summit in Paris in 2015, where it pledged to lead global climate change efforts.

Gautam Adani, Chairman of the Adani Group, expressed gratitude for the recognition, stating, "We are honored to be selected by SECI for this landmark solar award. Economic development and climate adaptation must progress together, with job creation and decarbonization as simultaneous goals." He emphasized that renewable power is poised to become the cleanest and most economical energy source globally, with the Adani Group aiming to play a pivotal role in this transformation.

The Times of India reported in November 2019 that Adani Green Energy emerged as a frontrunner in SECI’s manufacturing-linked solar tender. Adani proposed establishing a 1,000 MW solar manufacturing facility alongside a 4,000 MW solar power project, while Azure Power committed to a 500 MW manufacturing capacity. The tender saw bids exceeding the capacity on offer, marking the first oversubscription in renewable energy tenders in two years. Industry experts attributed this response to measures like safeguard duties on low-cost imports, primarily from Chinese companies, and other policy interventions, which spurred enthusiasm among bidders.

The charges against Adani and accomplices

Here are some of the high-profile charges in the 54-page indictment by the US prosecutors against Adani and seven others.

Gautam Adani met multiple times with Indian officials to pursue the bribery scheme personally.

Co-conspirators met in person and communicated through an electronic messaging app to discuss execution, including while in the US. They made extensive electronic documentation of their bribery efforts, including using cell phones to track the locations and recipients of the promised bribes and photographing a document summarizing the amounts offered. They prepared PowerPoint and Excel presentations to determine which payment option was best.

Some members of the group destroyed evidence in an effort to conceal their participation in the scheme, such as a PowerPoint analysis and electronic communications. Gautam Adani emailed pictures of every page of the search warrant and the grand jury subpoena the FBI handed his nephew and co-defendant Sagar Adani.