Adani Green Energy And Group Companies Deny Reports Of US Department Of Justice Bribery Investigation

Billionaire Gautam Adani’s group companies have said they have not received any notice from the US Department of Justice over a potential bribery investigation, but its renewable energy firm Adani Green Energy stated it is aware of an investigation into potential violations of American anti-corruption laws by an unrelated third party and the company has no relationship with the said third party, Adani Green Energy said in a filing on Tuesday.

Asked by stock exchanges to comment on a media report that US prosecutors had widened their probe of the Adani group to determine if any of their group entities engaged in bribery, 10 listed companies of the conglomerate in separate filings stated that they have “not received any notice from the Department of Justice of US with respect to the allegation” and that “the report is false”.

“The company has no relationship with the said third party and is thus unable to comment on the scope of the present United States investigation that the company or any of its personnel are subject to or exposed to, in connection with the company's alleged dealings with the third party,” Adani Green said, adding that it did not provide details of the nature of the investigation or the charges.

However, JP Morgan, in a note on the issue, said details of the reported investigation “are very scant, and the investigation itself might not lead to any successful prosecution, with likely limited potential financial/fundamental impact. “Assuming the news to be true, we believe that the legal basis for such investigations comes from the US Foreign Corrupt Practices Act (FCPA),” it said.

The FCPA, apart from provisions related to accounting fraud/internal controls, prohibits US and foreign (if under purview) individuals and corporates from making corrupt payments to foreign officials to obtain or retain business. “Based on our understanding, corporates that are listed in the US or have issued securities to US investors could fall under its purview too. Both the US Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) share enforcement authority under the FCPA,” it said.

The media report had stated that an Adani Group entity was potentially involved in “paying officials in India for favourable treatment on an energy project”. “Based on the profile of US dollar bond issuers from the group, this could be related to Adani Green Energy,” the brokerage said, adding that given the high level of transparency involved in various renewable energy tenders floated in India, the scope for significant corruption and bribery looks highly unlikely to us.