New York: A revelation has come to light that tarnishes the reputation of Ad. Group. The Justice Department has presented allegations of bribery of 250 million dollars i.e. about Rs 50 crore. It is alleged that this bribe was given to raise money from American investors to get the contract for a solar project in India. A highly placed person in the Andhra Pradesh government (which is out of power since June) is also involved in the Gautam Ad. bribery case. According to court documents, Ad. won the power purchase contract for his world’s largest solar project by bribing this man.
The US investigating agency believes that the seeds of this scam were sown in 2019 and its implementation took place between 2020 and 2022. According to court documents, Gautam Ad. himself was present in person and discussed the bribery scheme with the officer. After this, in 2021, Ad. Green Energy is accused of raising money from the American market by giving wrong information and misleading statements to international investors. The document also mentioned that Gautam had personally met Ad. three times before the Andhra Pradesh state government announced it would buy the majority of power from Ad. in December 2021. It also mentioned that some meetings were held at the Ahmedabad headquarters of Ad. Group and conversations were conducted through messenger apps.
Bribe to buy solar energy
According to a document available in the US court, Ad. Group had committed this entire scam after getting the contract to build the world’s largest solar power project in India. A total investment of $20 billion was proposed to create a power capacity of 26 gigawatts or 81 billion units per day in Kutch, Gujarat. However, the government-owned Solar Energy Corporation of India, which failed to purchase the power generated from the project, approached various state government power comp.es, and bribed them into power purchase agreements. On the basis of this power purchase, money was raised from American and international investors on the assumption that there would be a profit of two billion dollars every year for 20 years.
Gautam Ad., one of the richest men in the world, has been accused by Ad. and his associates of fraud, bribery and ultimately lying to investors in planning investments for the project.
On the other hand, US market regulator Securities Exchange Commission (SEC) has also filed a parallel complaint. Ad. Green Energy had raised Rs 17.5 crore from investors in America. The SEC has the authority to prosecute and impose sanctions under the Foreign Corrupt Practices Act on comp.es operating in the United States and receiving market investments by paying foreign bribes.
How was the bribe calculated?
As a power producer it was necessary to sell power after generation. Ad. Group comp.es had received contracts for a total of 12 gigawatts of solar power from the Solar Energy Corporation of the Government of India, but no state was ready to buy power at the fixed price. Ad.’s Indian company has got approval to supply 8 GW and its American subsidiary has got approval to supply 4 GW. If no buyer was found, a plan was made to pay the bribe in 2020. Gautam Ad. himself met top government officials of Andhra Pradesh thrice in the year 2021 in August, September and November. A bribe of $26.5 million i.e. Rs 2,029 crore was to be given, out of which $22.8 million i.e Rs 1,750 crore was to be given to an Andhra government official. State Governments like Odisha, Jammu and Kashmir, Andhra Pradesh, Chhattisgarh, Tamil Nadu and Central Solar Energy Corporation. Had signed an agreement to buy electricity from. Out of which Andhra Pradesh government announced an agreement to purchase a total of 7 GW of power in December 2021.
Sagar Ad. had an eye on bribery
Sagar Ad., executive director of Ad. Green and nephew of Gautam Ad., had an eye on how much power to give to which state, which officer to bribe, how much bribe to give. According to the charge sheet presented in the court, it is also mentioned that a bribe of one paise per MW was offered to the state government officials for power contracts.
Ad. Green Energy, owned by Ad. Group, is among those in talks with various state governments to sell power produced at the world’s largest solar power plant.
Mcap of Ad. group comp.es is Rs. Rs 2,20,000 crore cut
There was heavy selling pressure in the shares of Ad. group comp.es today after the report of six people including Gautam Ad., Sagar Ad. being found guilty by the US court on charges of alleged bribery and fraud. Rs 2,20,000 crores were lost. After Hindenburg’s allegations and these new reports, the shares of Ad. Group comp.es have fallen by 23 percent. In which the shares of Ad. Enterprises recorded the maximum decline of 22.61 percent. Apart from this, a difference of 20 percent was recorded in Ad. Energy, 18.90 percent in Ad. Green, 13.53 percent in Ad. Port, 11.98 percent in Ambuja Cement, 10.40 percent in Ad. Gas and 9.15 percent in Ad. Power.
