The indictment of industrialist Gautam Adani and his business associates by the U.S. Department of Justice (DoJ) presents detailed allegations regarding the processes followed by senior executives of Adani Green Energy Ltd. and Azure Power Global Ltd. (a renewable energy company headquartered in New Delhi, which used to be listed on the New York stock exchange) to bribe Indian government officials and secure lucrative solar power contracts.

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The indictment starts by explaining the alleged motivation for their resort to a 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 a manufacturing-linked solar tender offered by the Solar Energy Corporation of India (SECI), a company of the Union Ministry of New and Renewable Energy whose mission is to increase the use of renewable energy in India.

SECI’s inability to find buyers

As part of this award, Azure Power and Adani Green’s subsidiary would supply 4 GW and 8 GW of solar power, respectively, to the SECI, which would buy it at a fixed rate. The SECI, in turn, had to find State electricity distribution companies (discoms) that would purchase this 12 GW of solar power. This award, at the time, constituted one of the largest solar energy projects in the world. Azure Power projected that it would earn after-tax profits of $2 billion over 20 years.

However, “the high energy prices” set out in the LOA made it impossible for the SECI to find buyers, thus jeopardising the “lucrative LOAs and corresponding revenue”, notes the indictment.

As a result, “Gautam S. Adani, Sagar R Adani [Gautam’s nephew and executive director of Adani Green Energy], Vneet S Jaain [former CEO of Adani Green Energy], Ranjit Gupta [former CEO of Azure Power Global]… among others, devised a scheme to offer, authorise, make and promise to make bribe payments to Indian government officials” in exchange for the said officials getting the State discoms to enter into PSAs (power sale agreements) with the SECI.

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

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

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

Discoms’ response: from A.P. to J&K

The bribery scheme began to have an impact. Between July 2021 and February 2022, discoms “for the States and regions of Odisha, Jammu and Kashmir, Tamil Nadu, Chhattisgarh and Andhra Pradesh entered into PSAs with SECI”.

Further, “Andhra Pradesh’s electricity distribution companies entered into a PSA with SECI on or about December 1, 2021” after which the State agreed to “purchase approximately seven gigawatts of solar power, by far the largest amount of any Indian State or region”.

With the PSAs done, between October 2021 and February 2022, Adani Green and Azure Power, through subsidiaries, executed PPAs with the SECI. It was agreed that Azure Power would supply 650 MW of solar power to the SECI for Chhattisgarh, Tamil Nadu, Odisha, and Jammu and Kashmir (hereafter “the 650 MW PPAs”) and 2.3 GW for Andhra Pradesh (hereafter 2.3 GW PPAs). Likewise, Adani Green’s subsidiaries also executed PPAs with the SECI covering the same States and regions.

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

These “Bribe Notes” systematically identified the State or region for which officials had been offered a bribe, the total amount of the offered bribe, and the amount of solar power the State or region would agree to purchase in exchange for the bribe.

“The Bribe Notes also identified the per megawatt rate for the total bribe amount offered, the abbreviated titles of the government officials who would receive the bribes, and/or the allocation of the total bribe amount among government officials” within each State or region.

Who will pay how much to whom

The indictment details the multiple meetings between Mr. Gautam Adani, Mr. Vneet S. Jaain, and the “co-conspirators” to get Azure Power to pay its share of the bribe amount. “In anticipation of the meeting”, it states, “Jaain used his cellular phone to photograph a document summarising the amounts” Azure Power owed Adani Green “for its respective portion of the bribes”.

Apparently, Azure Power owed Adani Green ₹55 crore “for the bribes that were promised to secure the 650 MW PPAs” and ₹583 crore “for the bribes that were promised to secure the 2.3 GW PPAs”.

In one such bribery co-ordination meeting, Mr. Gautam Adani allegedly “presented multiple options” by which Azure Power could conceal satisfaction of its portion of the bribe payments, including by transferring the 2.3 GW PPAs to Adani Green or its subsidiaries. To help the Azure Power management decide “which corrupt payment option was best”, one of the alleged co-conspirators, Rupesh Agarwal, a former CEO of Azure Power, prepared “multiple analyses using PowerPoint and Excel”.

The options outlined in Mr. Agarwal’s PowerPoint presentation included: a. directly paying Adani Green the amounts owed to Gautam Adani, described as “development fee”; b. transferring all of its PPAs to Adani Green; c. transferring only the 2.3 GW PPAs to Adani Green; d. launching a joint-venture with Adani Green whereby the latter would build and operate Azure Power’s projects; e. transferring 2.3 GW PPAs to Adani Green and paying Adani Green a $7.5 million “fee” in connection with the 650 MW PPAs, which Azure Power would retain and develop.

Updating ‘Numero Uno’ and ‘Snake’

Interestingly, while communicating about the alleged bribery scheme, the co-conspirators used code names, with Mr. Gautam Adani referred to as “Mr [.]A,”, “Numero Uno”, and “the big man”, while Mr. Jaain was referred to as “V”, “snake”, and “Numero Uno minus one”.

The indictment alleges that the co-conspirators eventually agreed that Azure Power would return the 2.3 GW PPAs to the SECI, with the understanding that Adani Green or its subsidiary would acquire it for itself, “thereby satisfying a portion of” Azure Power’s bribery obligations.

Azure Power also agreed to pay Adani Green “its portion – approximately $7 million – of the bribe payments promised [by Adani Green] to Indian government officials” to secure the 650 MW PPAs, which would facilitate Azure Power retaining the project.

Mr. Agarwal and other senior executives of Azure Power then obtained Board approval for returning the 2.3 GW PPAs to the SECI by obfuscating the true reasons for this move and citing “deteriorating economics”. Around November 22, 2022, Azure Power’s Board of Directors authorised sending a letter to the SECI about withdrawing from the 2.3 GW PPAs. On the same day, Mr. Sagar Adani allegedly sent an electronic message to Mr. Gautam Adani stating that there is a Board meeting “where they are expected to approve the final letter to be sent to SECI. We will keep close track and chase it up properly”. Mr. Gautam Adani allegedly replied, “Ok”.

The actual letter from Azure Power to the SECI was sent on December 7, 2022. On December 8, Mr. Sagar Adani sent an electronic message to Mr. Gautam Adani, stating that Azure Power “has finally submitted letter to SECI today…will follow for next steps closely”. The indictment concludes from these exchanges that the Adanis “were secretly directing [Azure Power’s] return of the 2.3 GW PPAs to SECI”.

The alleged bribery scheme fructified finally on March 18, 2024, the day “SECI sent letters to [Azure Power] terminating the 2.3 GW PPAs, authorising reallocation of the 2.3 GW PPAs to [Adani Green’s] subsidiary and affirming [Azure Power’s] obligation to continue developing the 650 MW PPAs”.

While the alleged bribery scheme constitutes a criminal act as per the U.S. DoJ indictment, the U.S. Securities and Exchange Commission (SEC) has charged that during the very period the bribery scheme was allegedly in progress, “Adani Green raised more than $175 million from US investors and Azure Power’s stock was traded on the New York Stock Exchange”, which constitutes a violation of anti-fraud provisions of the federal securities laws.