Adani Green also canceled a similar offer last month due to high rates ahead of the US presidential election.
Adani Green has decided to go ahead with its proposed $600-million bond offering, according to a BSE filing on Thursday. The move comes after US prosecutors indicted its billionaire owner Gautam Adani for his role in an alleged years-long scheme to pay Indian officials $250 million in bribes in exchange for favorable terms for solar power contracts.
This is the second time that Adani Green’s bond issuance has been cancelled. The company also canceled a similar offer last month due to high rates ahead of the US presidential election.
US prosecutors accused Adani, 62, his nephew Sagar and other defendants of paying more than $250 million in bribes to Indian government officials between 2020 and 2024 to win solar energy contracts that could potentially bring in more than $2 billion in profits. This, they alleged, was concealed from US banks and investors from whom the Adani group had raised billions of dollars for the project.
US law allows foreign corruption allegations to be pursued if they involve specific links to American investors or markets.
Following this, Adani Green, the group’s green energy company, issued a statement.
Full statement of Adani Green Energy
“The United States Department of Justice and the United States Securities and Exchange Commission have issued criminal charges and civil complaints against Gautam Adani, members of our board, and, respectively, in the United States District Court for the Eastern District of New York. Sagar Adani. The United States Department of Justice has also implicated our board member, Vineet Jain, in such criminal charges,” Adani Green said in a BSE filing.
It added that “in light of these developments, our subsidiaries have decided not to proceed with the currently proposed USD denominated bond offering”.
What is the point?
Port-to-Energy Adani Group Chairman Gautam Adani, his nephew Sagar R Adani, who is executive director of the group’s renewable energy arm Adani Green Energy Ltd, and its former CEO Vineet Jain were charged with securities fraud. Conspiracy and wire fraud conspiracy. Adani was also charged in a US Securities and Exchange Commission (SEC) civil case.
The five-count indictment also accuses Sagar and Jain of violating federal law.
US authorities also charged three former employees of CDPQ, a large Canadian pension fund, in connection with the alleged scheme, saying they obstructed bribery investigations by deleting emails and agreeing to provide false information to the US government.
CDPQ is a shareholder in Adani companies investing in infrastructure projects.
The allegation could throw the group back into disarray, just as it was rocked by allegations of egregious fraud at US short seller Hindenburg Research.
In January 2023, allegations of Hindenburg’s “brazen stock manipulation and accounting fraud” wiped USD 150 billion off the conglomerate’s market value at its lowest point. The group’s shares have since recovered most of the losses.
The Adani Group denied all the allegations leveled by Hindenburg.
A school dropout, Gautam Adani founded his eponymous group as a commodity trading firm in 1988 and built a business empire that now spans airports, shipping ports, power generation, energy transmission and mining companies.
“Specifically, on or about March 17, 2023, FBI special agents contacted Sagar Adani in the United States and, pursuant to a judicially authorized search warrant, took custody of electronic devices in his possession,” the court document said.
According to the documents, some conspirators privately referred to Gautam Adani with the code names “Numero Uno” and “The Big Man”, while his nephew allegedly used his cellphone to track the bribe details.
“On or about March 18, 2023, defendant Gautam S. Adani emailed himself photographs of each page of the search warrant executed and the grand jury subpoena to defendant Sagar R. Adani,” it states.
Others who were charged criminally include Ranjit Gupta and Rupesh Aggarwal, the former CEO and former chief strategy and commercial officer, respectively, of Azure Power Global, who authorities said agreed to pay the bribes.
The complaint accuses them of violating the anti-fraud provisions of the federal securities laws and seeks a permanent injunction, civil penalties and officer and director bars.
During the alleged scheme, Adani Green raised more than USD 175 million from US investors and shares of Azure Power traded on the New York Stock Exchange, the SEC said in a statement.
Simultaneously, the US Attorney’s Office for the Eastern District of New York unsealed criminal charges against Adani and Sagar Adani, Cyril Cabanes and others associated with Adani Green and Azure Power.
The federal indictment in federal court in Brooklyn charges five others with conspiracy to violate the Foreign Corrupt Practices Act in connection with the bribery scheme, which involved one of the world’s largest solar power projects.