The reverberations of Gautam Adani’s indictment in Andhra Pradesh

It took an investigation by US authorities to expose the murky goings on in the dealings between Adani Green (an Adani group company involved in renewable energy), the Central government and the state of Andhra Pradesh led by the then-chief minister Y.S. Jagan Mohan Reddy. In November, the Securities and Exchange Commission (SEC) of the US formally charged Gautam Adani with bribing officials of the YSRCP government to secure a lucrative deal to supply solar power at rates most independent observers agreed were exorbitant.

At the heart of the indictment is the charge that Adani cheated investors and lending institutions in the US by providing false claims about his group’s anti-graft practices while actively abetting corruption in India.

According to Supreme Court lawyer K.V. Dhananjay, it was not just some superficial violation of procedures but “allegedly defrauding US investors and financial institutions of billions of dollars”. It should be remembered here that the Adani group raised nearly US$ 2 billion through loans and placement of bonds, while paying lip service to US anti-corruption legislation and being quite aware of a federal investigation into his group companies.

The charges created a furore in India. Adani group stock prices dropped sharply before recovering somewhat. The reverberations are still echoing in Andhra Pradesh where the N. Chandrababu Naidu government is considering what action to take on the mega 7,000 MW solar power project in the state, what with Adani accused of paying Rs 1,750 crore in bribes to the previous government.

One option is to ask the Solar Energy Corporation of India, the nodal public company involved in solar generation, to end the agreement citing concerns over the integrity of the deal.

A second option is to renegotiate the deal. While it proposes to deliver power at Rs 2.49 per kWh, analysts say that additional costs, including government levies, will take it to Rs 3.8 per kWh; over 25 years, this would mean a power bill of Rs 1.6 trillion.

A third option is to scuttle the whole deal, but this would involve a stiff penalty of Rs 2,100 crore and also set back Naidu’s efforts to woo investments in the state.

Meanwhile, it is reported that Adani Green has not kept its promise of supplying power to the state: 3,000 MW starting in September 2024. It is learnt that Andhra Pradesh will start receiving 1,000 MW only by April 2025. This is well short of the 6,000 MW promised by September 2025. While delaying supply to the state, Adani has been selling power to the power exchanges at a higher rate, leading to all sorts of justifiable accusations against the group.

As far as Jagan Mohan Reddy is concerned, the solar power bribery allegations are only the latest in a series of charges against him.

Earlier, there was the controversy over the use of adulterated ghee in the making of the famous Tirupati laddus offered to devotees in Tirumala. His government was accused of cutting corners and sourcing cheap ghee with traces of animal fat.

He is also accused of disproportionate assets in a case dating back to 2012. In fact, the Supreme Court recently took the CBI to task for not taking that case forward.

Another case by a TDP MLA had accused him of attempted murder with the help of two IPS officers, including the then CID chief and officer-in-charge of the intelligence wing of the state police.

Jagan Reddy has denied all allegations in all the cases. According to him, everything was above board. As for the Adani bribery allegations, he has sued several news portals for defamation.