BL Explanation: What is Adani’s bribery case?

In or around and between December 2019 and July 2020, Adani Green’s subsidiary won and received Letters of Award (LOAs) for a solar production related tender offered by SECI (Solar Energy Corporation of India Limited)

As part of that award, the Adani agreed to supply four gigawatts of solar energy to SEC), and a subsidiary agreed to supply eight gigawatts of solar energy to SECI. SECI, in turn, was responsible for finding state-owned electricity distribution companies that would purchase the 12 gigawatts of power.

The terms of the LOAs and the amended LOAs required SECI to purchase solar energy at a fixed rate. At the time of the award, the size and scope of the Manufacturing Linked Project was among the largest global solar energy projects. It was expected to generate significant profits for energy producers.

But the high energy prices contemplated in the LOAs made it difficult for SECI to find Indian state energy buyers under the Manufacturing Linked Project. After the award of the Manufacturing Linked Project, SECI unsuccessfully sought the Indian state and union governments to purchase the 12 gigawatts of solar power under PSAs. Without PSAs to sell the power to a state buyer, SECI would not enter into corresponding PPAs to purchase power from Adani group entities

SECI’s inability to find buyers jeopardized the lucrative LOAs and associated revenues that Adani expected to receive from the Manufacturing Linked Project. It is now alleged that Guatam Adani and others have developed a scheme to pay bribes to Indian government officials in exchange for the government officials, causing state electricity distribution companies to enter into PSAs with SECT,

U.S. authorities have alleged that over the course of the bribery scheme, the co-conspirators undertook extensive efforts to corruptly persuade government officials to execute PSAs for state-owned electric power distribution companies and regularly discussed these efforts among themselves, including through the use of a electronic messaging application.

It is alleged that Adani gave ₹2,029 crore in bribes in exchange for Indian government officials, causing the state’s electricity distribution companies to conduct PSAs under the Manufacturing Linked Project.

US bribery charges name Adani projects in Odisha, TN, J&K, Chhattisgarh, AP

Following the promise of bribes to Indian government officials, in or around 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 PSAs with SECI under the Production Linked Project. Andhra Pradesh’s electricity distribution companies entered into a PSA with SECI on or around December 1, 2021, under which the state agreed to purchase approximately seven gigawatts of solar power – by far the largest amount of any Indian state or region.

With PSAs executed under the Manufacturing Linked Project, SECI could enter into corresponding PPAs to purchase solar power from Adani group entities, including the US unit.

Adani used his cell phone to keep specific details of bribes offered and promised to government officials (Bribe Notes). The Bribe Notes identified: (i) the state or region for which government officials had received bribes; (ii) the total amount of bribes offered; and (iii) the estimated amount of solar energy the state or region would be willing to purchase in exchange for the bribe. In most cases, the Bribe Notes also specified the rate per megawatt for the total amount of bribes offered, the abbreviated titles of the government officials who would receive the bribes, and/or the distribution of the total amount of bribes among government officials within each state and region.