Adani Green Energy Ltd, an Indian renewable energy company, has seen its shares fall by over 25% in November after the U.S. Securities and Exchange Commission (SEC) accused it of involvement in a $250 million bribery scheme.
On November 20, 2024, the SEC charged Gautam and Sagar Adani of Adani Green Energy, along with Cyril Cabanes of Azure Power, with orchestrating a bribery scheme to obtain a multi-billion-dollar solar energy project awarded by the Indian government.
Adani Green Energy, which raised funds from U.S. investors through American Depository Receipts (ADRs) on the Singapore Exchange in 2021, is accused of misusing money from loans and bonds to illegally lobby for renewable energy projects in India, violating SEC regulations.
The November 20 announcement triggered a sharp selloff in Adani Green Energy’s stock, which, already under pressure from market rumors, fell over 25% after the charges became public, with a weekly trading volume of 33 million shares.
Publicly addressing the issue, the company has denied the allegations, terming them unfounded.
Backstory
The Adani Group, one of India’s largest conglomerates, has faced a series of controversies and allegations that have rocked investor confidence and drawn global attention.
- On January 24, 2023, Hindenburg Research accused the Adani Group of stock manipulation and accounting fraud, alleging the use of offshore shell companies to inflate revenue and manipulate share prices.
- The report triggered a swift market reaction, erasing $150 billion from the group’s market value within a month, though the company strongly denied the claims.
- In August 2023, the Organized Crime and Corruption Reporting Project (OCCRP) alleged that two Mauritius-based funds invested $430 million in Adani companies in 2017, with $1.4 million in fees reportedly paid to Vinod Adani, a relative of the group’s founder.
- By November 2023, protests erupted over Adani’s controversial win of the Dharavi redevelopment project, with critics fearing it would favor the company over local residents.
In August 2024, Hindenburg Research accused SEBI Chairperson Madhabi Puri Buch and her husband of links to offshore entities tied to Adani, causing the group’s stock to fall. At the same time, Swiss authorities froze over $310 million in Adani-related funds.
SEC bribery charges
- Following an investigation this year, the U.S. Securities and Exchange Commission (SEC) has charged top executives of Adani Green Energy with bribery and fraud.
- The investigation uncovered allegations that Adani Green Energy and Azure Power paid $250 million in bribes to Indian government officials to secure lucrative solar energy contracts.
- Prosecutors allege that the funds for these bribes were sourced from U.S. investors, who were misled when Adani Green Energy raised over $175 million through loans and bonds based on false statements.
About Adani Green Energy Ltd
Adani Green Energy Limited, established in 2015 and based in Ahmedabad, India, focuses on renewable energy generation, operating solar (7,393 MW), wind (1,401 MW), and hybrid (2,140 MW) power plants.
- Owned by Gautam Adani, who started his business journey in commodities trading in 1988, the company is part of the larger Adani Group.
- The Adani Group operates across multiple industries, including infrastructure, energy, and logistics, managing airports, India’s largest private port, and the Carmichael coal mine in Australia.
It also supplies electricity to Bangladesh and acquired Israel’s Haifa Port for $1.15 billion in 2023, with seven listed companies and a workforce of approximately 23,000 people.
