Adani group founder and chairman Gautam Adani “personally” met the Andhra Pradesh chief minister in August 2021 to persuade the state government to buy expensive renewable power from Solar Energy Corporation of India under an agreement that would ultimately benefit his firm Adani Green Energy, the US Securities & Exchange Commission (SEC) has alleged.
The US stock market regulator, which filed a separate complaint against Gautam Adani and his nephew Sagar for violating the anti-fraud provisions of federal securities laws, did not name the politician.
Jagan Mohan Reddy of the YSR Congress was the Andhra chief minister between May 2019 and June 2024.
In August 2021, Gautam Adani had met Reddy after the state government spurned a power pact with SECI.
“The ‘incentives’ were needed to cause Andhra Pradesh to do so,” the SEC alleged in its complaint which was also filed before the US court for the Eastern district of New York.
The SEC complaint said states such as Andhra and Odisha refused to buy power at the high price set by SECI.
The SECI tariff was based on the price at which Adani and Azure Power Global — a Mauritius-based entity, majority owned by two Canadian pension funds — were prepared to sell.
Gautam Adani had paid or promised a bribe to persuade the relevant Andhra government entities to enter into a power supply agreement (PSA) with SECI for the purchase of 7,000 MW of power capacity, the SEC alleged.
According to the complaint, Adani paid $200 million or about ₹1,750 crore to the AP government officials. Shortly after Adani’s meeting with the CM, Andhra Pradesh agreed to buy power from SECL.
Likewise, Adani Green’s internal records showed a payment equal to hundreds of thousands of dollars was paid or promised to government officials in Odisha to coax Grid Corporation of Odisha to sign a PSA to purchase 500 MW power from SECI.
Collecting dues
In 2022, after SECI managed to ink such agreements with many state governments, Gautam and Sagar Adani asked Azure to cough up one-third of the graft paid or promised to be paid, SEC alleged.
In his meetings with Azure Power officials, Gautam Adani had indicated that his efforts had succeeded. Azure was then asked to shoulder one-third of the burden for the bribes.
The discussions then turned to how Azure could pay its share through corporate transactions between Azure and Adani Green, which would have the effect of concealing the payment, the complaint noted.
One of the options offered to Azure for payment was to cede control of the most valuable of their projects — the supply contract for 2.3-gigawatt of power to Andhra.
Azure agreed. In December 2022 and February 2023, Azure sent letters to the SECI seeking to withdraw from the Andhra portion of the projects, calling it ‘unbankable and unviable’.
SEC alleged that this was only a pretext; the real reason was to ensure that Adani could grab that portion of the contract.
“The pretext worked. In December 2023, Adani Green publicly announced that it had signed a PPA with SECI for majority of the 2.3 GW portion of the Azure award that Azure had returned to SECI,” the US regulator alleged.