Shares of Adani Green Energy Ltd are in focus today after the US Securities and Exchange Commission (SEC) charged Gautam Adani and Sagar Adani, executives of Adani Green Energy Ltd amid an alleged massive bribery scheme.
According to the SEC’s allegations, the bribery scheme was orchestrated to enable two renewable energy companies– Adani Green and Azure Power, to capitalise on a multi-billion-dollar solar energy project that the companies had been awarded by the Indian government.
In the pre-open trade, Adani Green Energy shares were down 20 per cent at Rs 1,129.40 on BSE. During the alleged scheme, Adani Green raised more than $175 million from US investors and Azure Power’s stock was traded on the New York Stock Exchange, SEC said in a statement.
The US SEC charged Gautam Adani, Chairman of Adani Green’s Board of Directors, and his nephew, Sagar Adani, Executive Director of Adani Green’s Board. According to the SEC’s complaint, Gautam and Sagar Adani orchestrated a bribery scheme that involved paying or promising to pay the equivalent of hundreds of millions of dollars in bribes to Indian government officials to secure their commitment to purchase energy at above-market rates that would benefit Adani green and Azure Power.
“As alleged, Gautam and Sagar Adani were engaged in the bribery scheme during a September 2021 note offering by Adani Green that raised $750 million, including approximately $175 million from U.S. investors. The Adani Green offering materials included statements about its anti-corruption and anti-bribery efforts that were materially false or misleading in light of Gautam and Sagar Adani’s conduct,” it suggested.
The SEC also charged Cyril Cabanes, a former member of Azure Power’s Board of Directors, with Foreign Corrupt Practices Act (FCPA) violations for his role in the alleged bribery scheme. According to the SEC’s complaint, Cabanes allegedly facilitated the authorization of bribes in furtherance of the scheme while in the United States and abroad.
SEC said Gautam and Sagar Adani allegedly induced US investors to buy Adani Green bonds through an offering process that misrepresented not only that Adani Green had a robust anti-bribery compliance program but also that the company’s senior management had not and would not pay or promise to pay bribes, and Cyril Cabanes participated in the underlying bribery scheme while serving as director of a US public company.
Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement said: “We will continue to vigorously pursue and hold individuals, including senior corporate officers and directors, accountable when they violate our securities laws.”
The SEC’s complaint against Gautam and Sagar Adani charges them with violating the antifraud provisions of the federal securities laws. The complaint seeks permanent injunctions, civil penalties, and officer and director bars.
In a parallel action, the U.S. Attorney’s Office for the Eastern District of New York today unsealed criminal charges against Gautam and Sagar Adani and Cabanes, among other individuals connected to Adani Green and Azure Power.
The SEC’s ongoing investigation regarding Adani Green is being conducted by Nicholas Karasimas, Stewart Gilson, Christopher M. Colorado, and Alison Conn of the New York Regional Office.
