Sucheta Dalal 
Amid the uproar surrounding the indictments and arrest warrants in the sprawling Adani bribery scandal, the glaring silence of a central player – the Solar Energy Corporation of India (SECI) – stands out.
The policies of SECI, a central public sector undertaking, are at the heart of the criminal proceedings by the US Department of Justice and the civil complaint filed by the Securities Exchange Commission (SEC). And yet, SECI has chosen to remain silent – neither initiating an investigation, nor filing a complaint, nor providing any explanation.
This raises troubling questions about its role in the controversy, especially after France-based Total Energies has declared that it will not make any new financial contribution to the Adani Group.
Shares of Adani Green Energy Ltd (Adani Green) closed 8% lower (after an 11% drop) on November 25, after Total Energies’ statement. Significantly, Total Energies said it “was not made aware of the existence of an investigation into the alleged corruption scheme”.
In doing so, it confirms the DoJ’s charge that the Adani Group failed to disclose that it was under investigation by the SEC and had been raided by the FBI as far back as March 17, 2023.
It also persisted with the lies and denials in March 2024 after Bloomberg published a report headlined “US Probing Indian Billionaire Gautam Adani and His Group over Potential Bribery”.
Adani executives called the report ‘baseless’, ‘malicious’ and ‘defamatory’ and repeatedly told investors that they were fully compliant with anti-bribery laws and unaware of any investigation against chairman Gautam Adani.
Screenshot from the indictment by the office of the US Attorney for the Eastern District of New York.
A 41-page summary of the charges by the US SEC correctly places SECI and the high cost of its power at the centre of the sordid saga. Was SECI in the dark about the reason for the abrupt reversal by state utilities which suddenly agreed to pay inflated prices for solar power? Let’s understand the sequence of events as detailed by the SEC filing.
In 2021, Adani Green, under the leadership of Gautam Adani and Sagar Adani, “orchestrated a bribery scheme” involving hundreds of millions of dollars ($265mn – million – according to the justice department filing) to secure power purchase contracts for Adani Green.
These contracts were key to the Adani Group’s ambition to establish itself as the world’s largest private solar power producer. Now, Adani Green had raised $750mn through a corporate bond offering in September 2021, including $175mn from US investors. The sale of bonds required mandatory declarations that it had adhered to stringent US anti-bribery laws under the Foreign Corrupt Practices Act.
The US regulators allege that the Adani group made false declarations, even after they had hatched an elaborate plan to bribe power distribution companies (DISCOMs) to sign power purchase agreements (PPAs) with SECI. Deals between the DISCOMs and SECI were critical to Adani Green’s ambitious plan to set up the largest solar project in the world.
The SECI deal required solar power developers to construct a plant/plants in India capable of producing solar power component parts (such as cells, modules or wafers) and, in exchange, SECI would purchase power-generating capacity from these developers. These were called ‘manufacturing-linked project’ contracts, since they combined power generation with solar component manufacturing.
Apart from Adani Green, Azure Global Power (Azure), which had bagged SECI contracts, allegedly agreed to participate in the bribery scheme. It paid its share by surrendering its rights in an Andhra Pradesh project to Adani Green on the pretext that it was unviable.
Adani Green’s revenues were approximately $50mn and it had not recorded a profit, but the SECI deal would allow it to “earn more than a billion dollars in profit”, says the SEC. But there was a catch. The profits for Adani Green and Azure would only materialise if SECI was able to persuade various state DISCOMs to purchase power at a high enough tariff. SECI would then buy power from the two private companies and resell it to the state DISCOMs for 25 long years.
The five states mentioned in the indictment (Andhra Pradesh, Odisha, Chhattisgarh, Jammu & Kashmir and Tamil Nadu) were initially reluctant to pay ‘above-market’ power prices until the alleged bribery scheme was rolled out. Key to the problem was that SECI had agreed to pay energy prices to Adani Green and Azure that were way too high. As a Union government undertaking, why would it agree to such high ‘tentative’ prices without clarity about viability or discussion with state governments?
The process by which SECI arrived at this decision merits a detailed investigation. After all, high prices for solar power only rip off Indian consumers and businesses, especially when solar energy prices were on a decline. Without the state agreements, there would be no big pay-off for Adani Green or Azure. The US filings indicate that Azure was almost giving up on the project when the bribery plan was put into action and it agreed to share a third of the cost.
The role of the Union government has also been questioned by former Union secretary E.A.S. Sarma. In a letter to the finance minister, he alleges, “the Ministry of Power … has deliberately created scope for corruption in the solar sector by issuing illegal directives under Section 11 of the Electricity Act of 2003 to state power utilities to absorb a minimum of 10% of their power requirement, irrespective of cost, from centralised solar power plants set up by corporates like the Adani Group and the foreign-based Azure, both specifically arraigned in the indictment.”
He says it is ironic that the power ministry should encourage “corporates setting up large centralised solar plants in preference to decentralised systems like rooftops and solar-driven irrigation pumpsets.” Centralised plants require high investments, operate at low load factors and have high transmission and delivery losses, leading to higher costs to the consumer.
Also read: Loss of Reputation Is the Real Damage, for Adani and for India
According to Sarma, a review of the working of corporate solar plants during the past decade would make it clear that “there was all-round political corruption revolving around the setting up of most of those plants”.
Former IAS officer P.V. Ramesh has posted in X that in June 2019, Andhra Pradesh cancelled PPAs involving 23 projects to generate 2,132 MW of power. The same government then signed one PPA for 7,000 MW of solar power with SECI in December 2021. He alludes to the role of two bureaucrats in engineering this deal.
Since the Central Vigilance Commission is conspicuous by its silence, it is clear that we need an independent investigation into the policy for buying solar power, the machinations behind SECI’s and the strange ‘manufacturing-linked project’ contracts that seemed designed to impose higher costs on consumers while enriching private companies.
The role of powerful politicians and bureaucrats at the Centre, at least five states, SECI and various DISCOMs also warrants serious investigation. Who is best suited to do this, when so many are exposed by the US action?
The way forward
The US indictment has revived the demand for action against the Adani Group. An advocate has sought permission to place additional documents before the Supreme Court in a petition that was filed after the 2023 Hindenburg report. The opposition parties, led by the Congress party, are demanding a joint parliamentary committee (JPC) probe.
Given the number of political parties likely to be involved, a JPC may end up with a lot of drama and media coverage but no clear evidence or conclusions. This has happened in the past with some members openly rooting for persons under investigation.
A serious, time-bound investigation is possible only by an independent judicial commission, headed by a non-partisan judge, that is supported by officials from our tax, enforcement, investigation and vigilance agencies. Ideally, political parties should be allowed a say in choosing who heads the commission to ensure its independence.
This article first appeared on moneylife.in. It has been lightly edited for style.