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The United States Securities and Exchange Commission (SEC) has leveled serious allegations against Gautam Adani, chairman of the Adani Group, accusing him of bribery and fraud in connection with a massive solar power deal in India. The SEC's court filings detail a meeting in August 2021 between Adani and then-Andhra Pradesh Chief Minister Jagan Mohan Reddy. The purpose of this meeting, according to the SEC, was to overcome Andhra Pradesh's initial reluctance to sign an agreement with the Solar Energy Corporation of India (SECI) for the procurement of solar power. The filings explicitly state that "incentives" were discussed, and that a significant bribe was offered to secure the agreement.
The SEC's indictment alleges that Adani offered a bribe totaling ₹1,750 crore (approximately USD 208 million) to an unnamed Andhra Pradesh government official, referred to as "Foreign Official #1." This substantial sum allegedly served as a catalyst to expedite the agreement between Andhra Pradesh and SECI. Following this meeting, Andhra Pradesh proceeded to sign an agreement to purchase a staggering seven gigawatts of solar power from SECI, representing the largest single solar power procurement by any Indian state at that time. This rapid turnaround following the alleged bribe payment strongly suggests a direct causal link between the meeting and the subsequent agreement.
The SEC's investigation also uncovered a broader pattern of alleged bribery involving Adani and Azure Power. SECI, having initially awarded tenders to Adani Group and Azure Power to supply 12 gigawatts of solar power, faced difficulties finding buyers due to the high cost of the electricity. The SEC alleges that, in response to this challenge, Adani and Azure conspired to offer bribes to state officials in order to secure contracts with state electricity distribution companies. The alleged bribery scheme, spanning from 2021 to 2023, involved payments totaling USD 265 million. This widespread bribery scheme involved multiple states including Andhra Pradesh, Chhattisgarh, Tamil Nadu, Odisha, and Jammu and Kashmir, all of which subsequently signed on for solar power contracts.
The Adani Group vehemently denies the SEC's allegations, characterizing them as baseless and vowing to take legal action to defend its reputation. This stark contrast between the SEC's accusations and the Adani Group's categorical denial underscores the gravity of the situation and the potential for a protracted legal battle. The implications of this case extend far beyond the immediate financial ramifications, impacting India's reputation regarding transparency and accountability in government procurement and the wider energy sector.
The political ramifications of the SEC's allegations are equally significant. Jagan Mohan Reddy's YSRCP, which was in power in Andhra Pradesh during the period in question, issued a statement refuting the allegations, emphasizing that there was no direct agreement between the state government and the Adani Group. The party highlighted that the agreement signed in 2021 was between SECI and the state's power distribution companies (Discoms). Furthermore, the YSRCP pointed out that the power procurement was approved by both the Andhra Pradesh Electricity Regulatory Commission and the Central Electricity Regulatory Commission, suggesting a legitimate process followed despite the SEC's claims.
Conversely, the Telugu Desam Party (TDP), the current ruling party in Andhra Pradesh, has adopted a more cautious approach, choosing to withhold comment until a thorough review of the SEC's report is completed. This reserved stance contrasts sharply with the YSRCP's immediate and assertive response, highlighting the potentially significant political fallout from this scandal. The discrepancy between the two parties' reactions further fuels the controversy, adding another layer of complexity to an already intricate and high-stakes situation.
The SEC's indictment paints a picture of systemic corruption within India's energy sector, potentially impacting energy independence and sustainable development goals. The long-term consequences of this case extend beyond financial settlements; they encompass crucial questions of governmental oversight, transparency in large-scale infrastructure projects, and the broader implications for foreign investment in India's energy sector. The international scrutiny that this case has attracted will likely prompt renewed focus on ethical conduct and due diligence processes within the Indian government and private sector alike. The case serves as a stark reminder of the potential for unethical business practices to undermine economic progress and damage the reputation of major corporations and political figures alike.
Source: Adani met Jagan Reddy in 2021, promised Rs 1,750 crore bribe, says US agency