If Adani company ‘bribed’ officials in India, what is the US probe all about?

Adani Group chairperson Gautam Adani was among eight people indicted by US prosecutors for allegedly paying Rs 2,029 crore ($265 million) in bribes to officials for solar power contracts in four Indian states and one union territory. But even if Adani and his officials, including nephew Sagar Adani, are alleged to have paid bribes in India, what has the US got to do with it?

Before answering that, let us have a quick look at what the latest controversy is all about. Gautam Adani, Sagar and six others have been indicted for allegedly paying bribes to officials in India for securing solar power contracts with state electricity distribution companies. The bribes were allegedly paid between 2020 and 2024.

WHAT IS THE CASE ABOUT?

The four states and the Union Territory are — Andhra Pradesh, Chhattisgarh, Odisha, Tamil Nadu and Jammu and Kashmir. The allegation is that a large chunk was directed at officials in Andhra Pradesh.

In the US indictment, Gautam Adani is mentioned as the founder and chairperson of an ‘Indian Energy Company’ and nephew Sagar as executive director of that company (Adani Green Energy).

The company, along with a ‘US Issuer’, is accused of having bagged contracts to provide 12 gigawatts of solar power to state-owned Solar Energy Corporation of India (SECI).

Two people reportedly working for the ‘US Issuer’, Ranjit Gupta and Rupesh Agarwal, were functionaries of Azure Power.

According to the US indictment, SECI couldn’t find buyers to purchase the solar power and that put the deal at risk. It has been alleged that Adani Group and Azure Power offered bribes to government officials, who were to convince state discoms to buy power from SECI.

WHY IS THE US CONCERNED?

Now, let’s circle back to the question. So, if it was a case allegedly involving an Adani Group company and officials of power discoms in Indian states, what are US federal prosecutors probing, and why does it even concern the US?

The first issue is that Azure Power, to which Gupta and Agarwal were linked, is listed on the New York Stock Exchange (NYSE).

Then, it has been alleged that the Adani group company and the ‘US Issuer’ concealed from the US banks and investors from whom they raised billions for the solar energy project.

“Adani Green Energy then tried to raise money from US and international investors with a 2021 bond offering on the basis of false and misleading statements about the firm’s anti-corruption and anti-bribery efforts,” The New York Times reported, citing the indictment.

This non-disclosure and bribe, a serious charge, lie at the heart of the US federal probe and indictment.

The NYT reports that the US Securities and Exchange Commission (SEC) “filed a parallel civil case saying Adani Green Energy raised more than $175 million from US investors”.

The report adds that one of Adani’s associates was charged with conspiracy to violate the Foreign Corrupt Practices Act (FCPA). The law makes bribing foreign officials a crime for companies operating in the US.

The FCPA, established in 1977 after a series of corporate scandals, makes it illegal to offer, pay, or promise anything of value to foreign officials to gain business advantage.

So, even though the allegations of bribery might have taken place in Indian states, American authorities started investigations because the case involved American entities and investors.