Why the US has accused Adani of hiding its alleged bribes in India from American investors

When Gautam Adani announced a $10 billion investment in the United States after Donald Trump won the presidential polls earlier this month, there was a far more pressing matter in America that he was ignoring.

Since at least March 2023, the Adani Group chairman had known that US enforcement agencies were investigating his group and several associates for allegedly orchestrating an elaborate bribery scheme to gain solar energy business in India while keeping that information hidden from investors in the US.

His nephew, Sagar Adani, had been searched by special agents of the Federal Bureau of Investigation on March 17, 2023. They took custody of electronic devices he had in his possession and served him with a grand jury subpoena – a legal document that informs someone that they are the subject of an investigation and seeks more information from them.

The next day, Gautam Adani emailed himself photographs of each page of the search warrant and grand jury subpoena served on Sagar Adani, according to submissions made by the investigators in a district court in New York.

Yet, over the next year and a half, the Adani Group did not disclose to financial institutions, stock markets or investors that it was under investigation by the US government. In March 2024, when a news report appeared about the Adani Group facing a US investigation over potential bribery, the conglomerate denied any knowledge of it.

On Wednesday, however, the details of the investigation became public. Gautam Adani, his nephew Sagar Adani, and six others were charged with bribery, securities fraud, wire fraud and related conspiracies by the US Department of Justice and the US Securities and Exchange Commission. An indictment order laid out the allegations against them.

In a statement on Thursday, Adani denied the allegations, dismissing them as “baseless”. It asserted that it was a “law-abiding organisation, fully compliant with all laws”.

According to court documents quoted by Reuters on Thursday, a judge has now issued arrest warrants for Gautam Adani and others, which will be handed over to Indian agencies.

The indictment order has alleged that Adani and his nephew, instead of responding legally to the investigations, “caused others to make false and misleading statements regarding the Bribery Scheme to investors, potential investors and financial institutions”.

On Thursday, after the indictment order became public, the Adani Group said it had decided not to proceed with its $600 million bond offering in the US.

Bribery in India

The origins of the case lie in India’s solar energy sector.

As detailed in the court documents, between December 2019 and July 2020, the central government-run Solar Energy Corporation of India awarded tenders to the Adani Group and another firm, Azure Power, to supply 12 gigawatts of solar-generated electricity at a specified price.

The SECI, in turn, needed to find state power companies that would be willing to buy the electricity at that price.

When the SECI was unable to find state-owned buyers because of the high prices, according to the court documents, the Adani firm and Azure Power conspired to “devise a scheme to offer, authorize, make and promise to make bribe payments to Indian government officials” to get state companies to enter into power sale agreements, or PSAs, with the SECI. This would enable the central government firm to sign power purchase agreements with them.

According to the court document, Gautam Adani personally met a high-ranking official in Andhra Pradesh between August and November 2021 as part of this alleged bribery scheme. This official, who has not been identified by name in the document, was in power from May 2019 through June 2024.

The court order alleged bribes amounting to Rs 2,029 crore were offered, including a bribe of Rs 1,750 crore offered specifically to the Andhra Pradesh official.

Apart from Andhra Pradesh, the SECI went on to sign agreements with state companies in Chhattisgarh, Tamil Nadu, Odisha and Jammu and Kashmir, that facilitated business to the Adani Group and Azure Power.

Investments raised in the US

In December 2023, the five project companies formed in the five Indian states with whom power agreements were signed, raised $1.36 billion in the US through dollar-denominated senior secured loans, a credit facility provided by a group of global financial institutions.

The court document points out that in the agreement for the loan, the Adani Group made false assurances about its anti-bribery practices and claimed it had zero-tolerance for bribery. Even annual reports of the Adani Group firm between 2021 to 2024 contained “false and misleading statements” about its “anti-bribery practices”.

In March 2024, another $409 million was raised by an Adani joint venture in senior secured notes. The circular issued to investors made “false and misleading assurances” about corporate governance and “maintaining transparency and compliance in every aspect of operations”.

This article is part of a collaborative series reporting on the US charges against Adani.