The Adani Group finds itself in the spotlight as allegations of bribery surface concerning solar energy contracts involving the Solar Energy Corporation of India (SECI). The US District Court and the Securities and Exchange Commission (SEC) have framed charges against Gautam Adani and several group executives, leading to significant stock market losses for the conglomerate, with shares plunging by 10% to 25%.

The Solar Tender and Agreements

As per the court order, the case centers around manufacturing-linked solar tender offers issued by SECI. Here's a breakdown of the initial agreements:

1. Winning the Solar Tender:

   • A US-based issuer and a subsidiary of an Indian energy company won SECI's manufacturing-linked solar tender. Letters of Award (LoAs) were issued for the same.
   • The US issuer agreed to supply 4 GW of solar power to SECI.
   • The Indian energy subsidiary committed to supplying 8 GW of solar power.

2. SECI’s Responsibility:

   • SECI was tasked with finding state electricity distribution companies to purchase the combined 12 GW of solar power.
   • The LoAs obligated SECI to purchase solar power at a fixed rate.
   • At the time, this project was among the largest global solar energy initiatives.

Press Releases and Financial Projections

• In June 2020, Adani Green issued a press release announcing its involvement.
• The US issuer also publicized its 4 GW order, projecting $2 billion in Profit After Tax over 20 years.
• Ranjit Gupta, a key executive, highlighted plans for a large pipeline exceeding 4 GW.

Involvement of State-run Entities

The court order mentions multiple state electricity boards involved in power purchase agreements (PPAs) between October 2021 and February 2022:

• Chhattisgarh State Power Distribution Company Ltd.
• Tamil Nadu Generation and Distribution Corporation Ltd.
• GRIDCO Ltd.
• Jammu & Kashmir Power Corporation.
• Andhra Pradesh Central, Eastern, and Southern Power Distribution Companies.

Timeline of Events (October 2021 - February 2022)

• The US issuer and Indian subsidiaries signed PPAs with SECI during this period.
• 650 MW solar power was allocated for Chhattisgarh, Tamil Nadu, Odisha, and Jammu & Kashmir.
• 2.3 GW solar power was designated for Andhra Pradesh by the US issuer.
• The Indian energy company executed PPAs covering all five states.

Charges Framed by the US District Court

The court has outlined five counts against Adani Group executives and related entities:

1. Conspiracy to Violate the FCPA (Foreign Corrupt Practices Act).
2. Securities Fraud Conspiracy.
3. Wire Fraud Conspiracy.
4. Securities Fraud (pertaining to the 2021 144A Bond).
5. Conspiracy to Obstruct Justice.

Impact on Adani Group Stocks

The bribery allegations have led to a sharp decline in Adani Group's stock prices, reflecting market concerns over legal and reputational risks.

This case underscores the criticality of transparency and compliance in global energy projects, especially in sectors as scrutinized as renewable energy. As investigations unfold, the implications for SECI, state-run entities, and the broader solar energy market remain to be seen.