New Delhi, November 21 (Indian Express/India Today): A Reuters report says that arrest warrants were issued in the United States for Gautam Adani and his nephew Sagar Adani, after a grand jury in New York indicted the business tycoon and seven others on charges of bribery of US$ 265 million on Wednesday (November 20).
Lisa H Miller, Deputy Assistant Attorney General for the Justice Department’s Criminal Division, accused Adani and his associates of bribing Indian government officials and conspiring to obtain lucrative solar energy supply contracts “through corruption and fraud at the expense of US investors”.
US Court Charges
A federal court in Brooklyn, the US, witnessed a five-count criminal indictment, charging Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, executives of Adani Green Energy with conspiracies to commit securities and wire fraud and substantive securities fraud for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions on the basis of false and misleading statements.
The indictment also charges Ranjit Gupta and Rupesh Agarwal, former executives of a renewable-energy company with securities that had traded on the New York Stock Exchange (the US Issuer), and Cyril Cabanes, Saurabh Agarwal and Deepak Malhotra, former employees of a Canadian institutional investor, with conspiracy to violate the Foreign Corrupt Practices Act in connection with a bribery scheme also perpetrated by Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, involving one of the world’s largest solar energy projects.
Indian Officials Bribed
As alleged, the defendants orchestrated an elaborate scheme to bribe Indian government officials to secure power project contracts worth billions of dollars and Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain lied about the bribery scheme as they sought to raise capital from US and international investors. This indictment alleges schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice.
“These offenses were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of U.S. investors. The Criminal Division will continue to aggressively prosecute corrupt, deceptive, and obstructive conduct that violates U.S. law, no matter where in the world it occurs,” the filings said.
Getting Solar Contract
“Gautam S. Adani and seven other business executives allegedly bribed the Indian government to finance lucrative contracts designed to benefit their businesses. Adani and other defendants also defrauded investors by raising capital on the basis of false statements about bribery and corruption, while still other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government’s investigation,” stated FBI Assistant Director in Charge Dennehy. “The FBI maintains its steadfast mission to expose all corrupt agreements, especially with international governments, and protect investors from related harm.”
As alleged in the indictment, between approximately 2020 and 2024, the defendants agreed to pay more than $250 million in bribes to Indian government officials to obtain lucrative solar energy supply contracts with the Indian government, which were projected to generate more than $2 billion in profits after tax over an approximately 20-year period (the Bribery Scheme).
Adani Met Officials
On several occasions, Gautam S. Adani personally met with an Indian government official to advance the Bribery Scheme, and the defendants held in-person meetings with each other to discuss aspects of its execution, court filings said. The defendants frequently discussed their efforts in furtherance of the Bribery Scheme, including through an electronic messaging application, it said.
The defendants also extensively documented their corrupt efforts: for example, Sagar R. Adani used his cellular phone to track specific details of the bribes offered and promised to government officials; Vneet S. Jaain used his cellular phone to photograph a document summarizing various bribe amounts the U.S. Issuer owed the Indian Energy Company for its respective portion of the bribes; and Rupesh Agarwal prepared and distributed to other defendants multiple analyses using PowerPoint and Excel that summarized various options for paying and concealing bribe payments, the filings said.
Power Pacts Signed
According to the court filings, following the promise of bribes to Indian government officials, in or about and between July 2021 and February 2022, electricity distribution companies for the states and regions of Odisha, Jammu and Kashmir, Tamil Nadu, Chhattisgarh and Andhra Pradesh entered into power sale agreements (PSAs) with Solar Energy Corporation of India (SECI) under the Manufacturing Linked Project.
Andhra Pradesh’s electricity distribution companies entered into a PSA with SECI on or about December 1, 2021, pursuant to which the state agreed to purchase approximately seven gigawatts of solar power- by far the largest amount of any Indian state or region, the court filings said.
India Today Adds:
The four states and the Union Territory are — Andhra Pradesh, Chhattisgarh, Odisha, Tamil Nadu and Jammu and Kashmir, respectively. 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.
Arrest warrants have been issued in the US for Adani and his nephew Sagar and prosecutors plan to hand those warrants to foreign law enforcement, court records show.
The Adani Group has, however, called the allegations baseless and said it would take legal action.
WHY Is 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 bribing, 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 USD 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.
What is an indictment?
What is an indictment in the US legal system and what does it mean for Adani and his alleged conspirators? What is likely to happen next?
According to Black’s Law Dictionary, “An indictment is a formal written accusation” issued against a party charged with a crime, following a step-by-step process.
After investigating an alleged offence, the police hand over the evidence to a public prosecutor — a lawyer representing either the state or federal government, depending on whether the accusations relate to state or federal offences. If the prosecutor believes a serious crime or a “felony” has been committed, she may then initiate the selection of a grand jury.
What is a grand jury and who are its members?
A grand jury is a panel, composed of people selected randomly from a “fair cross-section” of citizens living within the jurisdiction of the court that may hear the case. It can include up to 23 people in the State of New York, with a minimum of 16 jurors required to be present to hear evidence.
This step is crucial, as according to the official Grand Juror’s Handbook for the State of New York (where Adani and his associates have been charged), “In New York State, a person cannot be brought to trial for a felony unless that person has been indicted by a grand jury.”
What does a grand jury do?
Unlike a trial jury that one sees in legal procedural dramas or movies, the purpose of a grand jury is not to determine the innocence or guilt of an accused person. While a trial jury must determine if a person is guilty “beyond reasonable doubt”, a grand jury needs to meet a lower standard. As an additional step to the criminal trial process, the grand jury must decide if the evidence on record is enough to necessitate holding a trial at all.
If the grand jury deems the evidence sufficient, it issues an “indictment” with a list of formal charges against the accused. The case will then be taken to trial for a final hearing and decision.
Grand jury proceedings are also held in secret, as opposed to trial proceedings open to the public. To deliver an indictment, there need not be unanimous agreement among the jurors, unlike when the case goes to trial. In New York, a minimum of 12 jurors (out of the 16 to 23 who have heard the evidence) must agree on whether to issue an indictment.
What happens now?
In Adani’s case, following the indictment, the trial will likely move to the “arraignment” stage. The judge will communicate the charges and decide whether to grant bail to the accused persons, who will, in turn, decide whether to plead guilty or not guilty in response to the charges. If they plead not guilty, the case will proceed to a jury trial.
According to Reuters, prosecutors are reportedly planning to hand the arrest warrants to foreign law enforcement.
The fresh allegations filed in the US District court, Brooklyn, are far more serious as there are documents involving conversations and other material records that show money raised from US investors was allegedly used to bribe government officials in India.
Nearly 22 months after the Adani group faced a barrage of charges and allegations of manipulation and accounting fraud scheme from US-based short-seller Hindenburg Research, the Indian business conglomerate headed by Gautam Adani is now rocked by allegations of major bribery charges to sign power contracts in a US court. The fresh allegations filed in the US District court, Brooklyn, are far more serious as there are documents involving conversations and other material records that show money raised from US investors was allegedly used to bribe government officials in India.
Hindenberg Case
The Hindenberg case was largely restricted charges raised by the US-based shortseller about alleged stock-manipulation, related party transactions and charges of stock manipulation.
The US short-seller alleged it identified numerous undisclosed related party transactions by both listed and private companies, seemingly an open and repeated violation of Indian disclosure laws. In one instance, a Vinod Adani-controlled Mauritius entity with no signs of substantive operations lent Rs 1171 crore ($253 million at that time) to a private Adani entity which did not disclose it as being a related party loan. The private entity subsequently lent funds to listed entities, including Rs 984 crore ($138 million at more recent substantially lower exchange rates) to Adani Enterprises. Another Vinod Adani-controlled UAE entity called Emerging Market Investment DMCC lent U.S. $1 billion to an Adani Powersubsidiary, the US firm alleged.
It alleged that Adani´s key 7 listed companies have a total of 578 subsidiaries, some of which are incorporated in notoriously opaque jurisdictions including Mauritius, Panama and the UAE, according to the annual reports of the conglomerate. The key 7 listed entities collectively engaged in a staggering total of 6,025 separate related-party transactions in fiscal year 2022 alone, per BSE disclosures, it alleged.
Vinod Adani role
Gautam Adani’s elder brother Vinod Adani and offshore entities he controls have played a central role in Adani Group company scandals, including an Rs 680 crore (U.S. $151 million) diamond trading scandal and an Rs 3974 crore ($800 million at the time) power generation over-invoicing scandal, Hindenburg alleged.
The government investigations into those scandals alleged that Vinod Adani’s offshore entities were involved in sham transactions and inappropriately received payments from listed companies of the Adani Group for which there was little or zero public disclosure at the time. “Our research, which included downloading and cataloguing the full Mauritius corporate registry database, evidences how Vinod Adani, along with other close associates, have set up dozens of entities in Mauritius that have little to no genuine corporate presence,” it alleged.
Share ownership
Mauritius-based entities like APMS Investment Fund, Cresta Fund, LTS Investment Fund, Elara India Opportunities Fund, and Opal Investments collectively and almost exclusively hold shares in Adani-listed companies, totalling almost U.S. $8 billion, the US firm alleged. Given that these entities are key public shareholders in Adani, what is the original source of funds for their investments in Adani companies?, the US asked.
The US firm said, “entities associated with Monterosa Investment Holdings collectively own at least U.S. $4.5 billion in concentrated holdings of Adani Stock. Monterosa’s CEO served as director in 3 companies alongside fugitive diamond merchant Jatin Mehta, whose son is married to Vinod Adani’s daughter. What is the full extent of the relationship between Monterosa, its funds, and the Adani family?”
Adani-PMC connection
The US alleged that listed Adani companies paid Rs 6300 crore to private contractor PMC Projects over the past 12 years to help construct major projects. A 2014 DRI investigation called PMC Projects a “dummy firm” for Adani Group. Newly revealed ownership records show that PMC Projects is owned by the son of Chang Chung-Ling, the close associate of Vinod Adani. Taiwanese media reports that the son is “Adani Group’s Taiwan representative”, it alleged.
Funds’ holding in Adani:
In its report on Adani, Hindenburg alleged a group of 5 supposedly independent investment funds have an incredibly suspicious pattern of holdings. All 5 entities were formed out of Mauritius by the same incorporator, based out of the same address, and with multiple overlapping nominee directors: APMS Investment Fund, Albula Investment Fund, Cresta Fund Ltd, LTS Investment Fund Ltd and Lotus Global Investment Fund, it alleged.
“Adani family members allegedly cooperated to create offshore shell entities in tax-haven jurisdictions like Mauritius, the UAE, and Caribbean Islands, generating forged import/export documentation in an apparent effort to generate fake or illegitimate turnover and to siphon money from the listed companies,” it alleged.
NOVEMBER 2024: US COURT FILINGS CHARGES
A federal court in Brooklyn, the US, witnessed a five-count criminal indictment, charging Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, executives of Adani Green Energy with conspiracies to commit securities and wire fraud and substantive securities fraud for their roles in a multi-billion-dollar scheme to obtain funds from US investors and global financial institutions on the basis of false and misleading statements.
The indictment also charges Ranjit Gupta and Rupesh Agarwal, former executives of a renewable-energy company with securities that had traded on the New York Stock Exchange (the US Issuer), and Cyril Cabanes, Saurabh Agarwal and Deepak Malhotra, former employees of a Canadian institutional investor, with conspiracy to violate the Foreign Corrupt Practices Act in connection with a bribery scheme also perpetrated by Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, involving one of the world’s largest solar energy projects.
Indian Officials Bribed
As alleged, the defendants orchestrated an elaborate scheme to bribe Indian government officials to secure power project contracts worth billions of dollars and Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain lied about the bribery scheme as they sought to raise capital from US and international investors. This indictment alleges schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice,
“These offenses were allegedly committed by senior executives and directors to obtain and finance massive state energy supply contracts through corruption and fraud at the expense of U.S. investors. The Criminal Division will continue to aggressively prosecute corrupt, deceptive, and obstructive conduct that violates U.S. law, no matter where in the world it occurs,” the filings said.
Getting hold of solar contract
“Gautam S. Adani and seven other business executives allegedly bribed the Indian government to finance lucrative contracts designed to benefit their businesses. Adani and other defendants also defrauded investors by raising capital on the basis of false statements about bribery and corruption, while still other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government’s investigation,” stated FBI Assistant Director in Charge Dennehy. “The FBI maintains its steadfast mission to expose all corrupt agreements, especially with international governments, and protect investors from related harm.”
As alleged in the indictment, between approximately 2020 and 2024, the defendants agreed to pay more than $250 million in bribes to Indian government officials to obtain lucrative solar energy supply contracts with the Indian government, which were projected to generate more than $2 billion in profits after tax over an approximately 20-year period (the Bribery Scheme).
Adani personally met officials
On several occasions, Gautam S. Adani personally met with an Indian government official to advance the Bribery Scheme, and the defendants held in-person meetings with each other to discuss aspects of its execution, court filings said. The defendants frequently discussed their efforts in furtherance of the Bribery Scheme, including through an electronic messaging application, it said.
The defendants also extensively documented their corrupt efforts: for example, Sagar R. Adani used his cellular phone to track specific details of the bribes offered and promised to government officials; Vneet S. Jaain used his cellular phone to photograph a document summarizing various bribe amounts the U.S. Issuer owed the Indian Energy Company for its respective portion of the bribes; and Rupesh Agarwal prepared and distributed to other defendants multiple analyses using PowerPoint and Excel that summarized various options for paying and concealing bribe payments, the filings said.
Power pacts signed
According to the court filings, following the promise of bribes to Indian government officials, in or about and between July 2021 and February 2022, electricity distribution companies for the states and regions of Odisha, Jammuand Kashmir, Tamil Nadu, Chhattisgarh and Andhra Pradesh entered into power sale agreements (PSAs) with Solar Energy Corporation of India (SECI) under the Manufacturing Linked Project.
Andhra Pradesh’s electricity distribution companies entered into a PSA with SECI on or about December 1, 2021, pursuant to which the state agreed to purchase approximately seven gigawatts of solar power- by far the largest amount of any Indian state or region, the court filings said.
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 bribing, 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 USD 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.
END
(Except for the headline, this story has not been edited by PostX News and is published from a syndicated feed.)
