Adani bribery case: Accused executive’s new company landed a $1.2 billion investment pact from REC in September

Bengaluru: The chief executive of a two-year-old zero-revenue green energy company that recently scored a ₹10,000 crore ($1.2 billion) investment commitment from REC Ltd is among those indicted in the $250 million Adani bribery case.

New Delhi-based Ocior Energy’s co-founder and CEO Ranjit Gupta was the chief executive of Azure Power Global Ltd, the company in the thick of the bribery charges by US prosecutors, between 2019 and 2022.

Ocior’s other co-founder, its chief operating officer Murali Subramanian, was first president and then COO of Azure Power when Gupta was at its helm. Prior to joining Azure Power, Gupta and Subramanian had co-founded Actis Llp-backed renewable energy company Ostro Energy, which Renew Power acquired in 2018.

Ocior Energy signed a memorandum of understanding with REC, the Indian state-owned firm that finances and promotes power projects, in September this year to construct a plant to produce 200,000 tonnes of green ammonia, or carbon-free ammonia, in Gopalpur, a coastal town in Odisha.

Gupta and Subramanian, both graduates of the Indian Institute of Technology, Bombay, set up Ocior Energy in August 2022. This was after Azure Power’s board asked them to resign in April, according to the US Department of Justice’s complaint dated 20 November.

The US Department of Justice’s complaint mentions an unnamed “co-conspirator 2” along with Gupta. It does not say why Azure’s board asked Gupta and Subramanian to leave.

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US prosecutors began investigating the case two years ago after Azure Power, previously listed on the New York Stock Exchange, disclosed that its audit committee had received two whistleblower complaints in 2022 detailing improper payments to Indian government officials. The investigations culminated in US prosecutors indicting Indian billionaire Gautam Adani and seven others in a $250 million bribery case.

A questionnaire emailed to Gupta on Saturday went unanswered. Subramanian declined to offer a comment. It is unclear if Gupta and Subramanian shared details about the US investigation with REC. An email sent to REC on Saturday seeking comment remained unanswered.

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The co-conspirator

The US Department of Justice has described the above-mentioned “co-conspirator #2” as an Indian citizen who held a high-ranking position at Azure Power between July 2019 and April 2022. According to his LinkedIn profile, Subramanian was the chief operating officer of Azure Power Global during that time.  

“Beginning in or about 2020, defendant Ranjit Gupta and Co-Conspirator #2, while acting within the scope of their employment as officers, employees and agents of the U.S. Issuer, knowingly and willfully conspired and agreed with each other and others, including but not limited to the defendants Gautam S. Adani, Sagar R. Adani and Vneet S. Jaain, to corruptly offer, authorize, promise to pay and to pay bribes to and for the benefit of government officials in India to cause Indian state electricity distribution companies to enter into contracts with SECI in order for the Indian Energy Company, the Indian Energy Company’s subsidiaries and the U.S. Issuer to obtain and retain business,” the US Department of Justice said in its complaint dated 20 November.  

Adani Group has denied the allegations against its directors, including Gautam Adani and his nephew Sagar Adani, terming the charges as “baseless”.

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The Ocior empire

Ocior Energy has zero revenue and 10 employees, including Gupta and Subramanian, but has outlined big plans. In press statements, Ocior has announced $21 billion in investments by 2030 to build a green energy empire from Egypt to Odisha. However, it has yet to share the funding source for these plans.

At least one infrastructure expert who formerly worked with a Big Four consultancy firm for over a decade expects that REC’s MoU with Ocior may remain a non-starter.

“Typically, MoUs are subject to conditions and due diligence before they become financing commitments. A company whose cofounders are under a probe is unlikely to be able to find the projects and investors and meet the prerequisites for financing,” said Manish Agarwal, a Mumbai-based independent infrastructure expert.

“The envisaged billions of dollars of investments would be unlikely to fructify for the same reasons,” said Agarwal.

Gupta, along with seven other executives, including Adani group founder and chair Gautam Adani, is alleged to have paid ₹2,000 crore ($250 million) in bribes to unnamed Indian officials between 2020 and 2024 in exchange for favourable terms on solar power contracts awarded to Adani Green Energy Ltd and Azure Power.

Azure Power and Adani Green Energy were shortlisted by Solar Energy Corporation of India in December 2019 to construct solar cells and produce 10 GW of power. SECI, a company under India’s ministry of new and renewable energy, oversees New Delhi’s renewable energy plans, including funding large solar projects.

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Ocior Energy’s stated plans include setting up a 1 million tonne per year green hydrogen and ammonia plant in the Kutch district of Gujarat and a 1 million tonne per year green ammonia plant in Andhra Pradesh. The company has said that both projects will require ₹80,000 crore ($10 billion) of investments.

Overseas, Ocior Energy signed a preliminary agreement with Egypt’s government in June, promising to spend $4.25 billion on a green hydrogen and ammonia project in the Suez Canal Economic Zone. In December last year, it announced plans to invest $5 billion in Jordan to set up a 1 million tonne per year green ammonia plant by 2030.

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