*

India's Gautam Adani charged in US over alleged bribes

*

SEC investigation dates back at least two years

*

FBI seized Adani nephew's electronics in 2023

By Luc Cohen

NEW YORK, Nov 21 (Reuters) - In June of 2020, a

renewable energy company owned by Indian billionaire Gautam

Adani won what it called the single largest solar development

bid ever awarded: an agreement to supply 8 gigawatts of

electricity to a state-owned power company.

But there was a problem. Local power companies did not want

to pay the prices the state company was offering, jeopardizing

the deal, according to U.S. authorities. To save the deal, Adani

allegedly decided to bribe local officials to persuade them to

buy the electricity.

That allegation is at the heart of U.S. criminal and civil

charges unsealed on Wednesday against Adani, who is not

currently in U.S. custody and is believed to be in India. His

company, Adani Group, said the charges were "baseless" and that

it would seek "all possible legal recourse."

The alleged hundreds of millions of dollars in bribes

promised to local Indian officials caught the attention of the

U.S. Justice Department and Securities and Exchange Commission

as Adani's companies were raising funds from U.S.-based

investors in several transactions starting in 2021.

This account of how the alleged scheme unfolded is drawn

from federal prosecutors' 54-page criminal indictment of Adani

and seven of his associates and two parallel civil SEC

complaints, which extensively cite electronic messages between

the scheme's alleged participants.

In early 2020, the Solar Energy Corporation of India awarded

Adani Green Energy and another company, Azure Power

Global ( AZREF ), contracts for a 12-gigawatt solar energy

project, expected to yield billions of dollars in revenue for

both companies, according to the indictment.

It was a major step forward for Adani Green Energy, run by

Adani's nephew, Sagar Adani. Up until that point, the company

had only earned roughly $50 million in its history and had yet

to turn a profit, according to the SEC complaint.

But the initiative soon hit roadblocks. Local state

electricity distributors were reluctant to commit to buying the

new solar power, expecting prices to fall in the future,

according to an April 7, 2021 report by the Institute for Energy

Economics and Financial Analysis, a think tank.

Sagar Adani and the Azure CEO at the time discussed the

delays and hinted at bribes on the encrypted messaging

application WhatsApp, according to the SEC.

When the Azure CEO wrote on Nov. 24, 2020, that the local

power companies "are being motivated," Sagar Adani allegedly

replied, "Yup ... but the optics are very difficult to cover. In

February 2021, Sagar Adani allegedly wrote to the CEO, "Just so

you know, we have doubled the incentives to push for these

acceptances."

The SEC did not name the Azure CEO as a defendant, but

Azure's securities filings show the CEO at the time was Ranjit

Gupta.

Gupta was charged by the Justice Department with conspiracy

to violate an anti-bribery law. He did not immediately respond

to a request for comment.

Azure said on Thursday it was cooperating with the U.S.

investigations, and that the individuals involved with the

accusations had left the company more than a year ago.

'SUDDEN GOOD FORTUNE'

In August of 2021, Gautam Adani had the first of several

meetings with an official in the southern state of Andhra

Pradesh, to whom he allegedly ultimately promised $228 million

in bribes in exchange for agreeing to have the state buy the

power, according to the Justice Department's indictment.

By December, Andhra Pradesh had agreed to buy the power, and

other states with smaller contracts soon followed. Other states'

officials were promised bribes as well, U.S. authorities said.

During a Dec. 6, 2021 meeting at a coffee shop, Azure

executives allegedly discussed "rumors that the Adanis had

somehow facilitated signing" of the deals, according to the SEC.

Gautam Adani said on Dec. 14, 2021, the company was on track

"to become the world's largest renewables player by 2030."

"The sudden good fortune for Azure and Adani Green

prompted speculation in the marketplace about the contract

awards," the SEC wrote in its complaint.

LETTER FROM THE SEC

Before long, the SEC began to probe. The agency sent a

"general inquiry" letter to Azure - which at the time traded on

the New York Stock Exchange - on March 17, 2022, asking about

its recent contracts and if foreign officials had sought

anything of value, according to the Justice Department

indictment.

According to the Department of Justice, Gautam Adani told

representatives of Azure during a meeting in his Ahmedabad,

India office the next month that he expected to be reimbursed

more than $80 million for the bribes he had paid officials that

ultimately benefited Azure's contracts.

Some Azure representatives and a leading investor in the

company decided to pay Adani back by allowing his company to

take over a potentially profitable project. The representatives

and investor allegedly agreed to tell Azure's board of directors

that Adani had requested bribe money, but hid their role in the

scheme, prosecutors said.

All the while, Adani's companies were raising billions of

dollars in loans and bonds through international banks,

including from U.S. investors. In four separate fundraising

transactions between 2021 and 2024, the companies sent investors

documents indicating that they had not paid bribes - statements

prosecutors say are false and constitute fraud.

FBI SEARCH

During a visit to the United States on March 17, 2023, FBI

agents seized Sagar Adani's electronic devices. The agents

handed him a search warrant from a judge indicating that the

U.S. government was investigating potential violations of fraud

statutes and the Foreign Corrupt Practices Act.

According to prosecutors, Gautam Adani emailed himself

photographs of each page of the search warrant on March 18,

2023.

His companies nonetheless went through with a $1.36 billion

syndicated loan agreement on Dec. 5, 2023, and another sale of

secured notes in March 2024, and once again furnished investors

with misleading information about their anti-bribery practices,

according to prosecutors.

On Oct. 24, federal prosecutors in Brooklyn secured a secret

grand jury indictment against Gautam Adani, Sagar Adani, Gupta,

and five others allegedly involved in the scheme.

The indictment was unsealed on Nov. 20, prompting a $27

billion plunge in Adani Group companies' market value. Adani

Green Energy promptly canceled a scheduled $600 million bond

sale.