SEC charges Adani in $265 mn bribery scandal: Here are the key allegations

The case alleged that Gautam Adani and others conspired to pay about $265 million in bribes to Indian govt officials to secure energy contracts for Adani Green. To understand the allegations, read:

Billionaire industrialist Gautam Adani, along with his nephew Sagar Adani and six other defendants, has been charged by the United States Securities and Exchange Commission (SEC) in an alleged bribery and fraud scheme worth millions of dollars.

 

The case alleged that Adani and others conspired to pay about $265 million in bribes to Indian government officials to secure solar energy contracts for Adani Green Energy, the renewable energy arm of the Adani Group. The SEC alleged that the incident occurred during a September 2021 offering by Adani Green that raised $750 million, including $175 million from US investors. The offering materials falsely claimed anti-corruption efforts, deceiving US investors, the complaint further stated. 

 

The Adani Group reacted to the allegations, noting: "As stated by the US Department of Justice itself, "the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty." All possible legal recourse will be sought. The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations. We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws. "

The SEC’s charges outlines several key allegations against Adani and others:

1. Bribery scheme:

 

The SEC complaint filed in New York alleges that Adani and others orchestrated a scheme to pay or promise over $250 million in bribes to Indian officials for contracts benefiting Adani Green Energy and Azure Power, another Indian company.

 

2. Misleading statements:

 

The SEC claimed that during Adani Green’s September 2021 note offering, which raised $750 million, the offering materials misrepresented the company’s anti-corruption efforts, despite ongoing bribery activities.

 

3. Violations of securities laws:

 

The charges against the Adanis include violations of the antifraud provisions of federal securities laws. The SEC is seeking permanent injunctions, civil penalties, and bans on them serving as officers or directors of public companies.

 

4. Criminal charges:

 

The SEC’s civil action coincides with a criminal charges by the US Attorney’s Office for the Eastern District of New York, which includes similar allegations of securities fraud and conspiracy.

What specific anti-fraud regulations did Adani allegedly breach?

1. Misleading investors:

 

The SEC has charged Adani with defrauding US investors by concealing that Adani Green’s India-based solar energy project was allegedly facilitated through bribery.

 

2. Violating antifraud provisions of US Securities laws:

 

Gautam Adani, Sagar Adani, and Vneet Jaain of Adani Green Energy were charged with securities fraud, securities fraud conspiracy, and wire fraud conspiracy. The Adanis were also charged in a US Securities and Exchange Commission civil case.

 

The other five defendants were charged with conspiring to violate the Foreign Corrupt Practices Act (FCPA), a US anti-bribery law, and four were charged with conspiring to obstruct justice.

Besides Adanis, other accused include:

• Ranjit Gupta – Former chief executive officer (CEO) of Azure Power Global

 

• Rupesh Agarwal – Former chief strategy and commercial officer of Azure Power Global

 

• Cyril Cabanes – Former member of the board of directors at Azure Power Global

 

• Vneet Jaain – Executive at Adani Green Energy

 

• Saurabh Agarwal

 

• Deepak Malhotra