Adani ‘bribery’ case: Is Andhra Pradesh planning to cancel power deal with Gautam Adani-led group?

The Andhra Pradesh state government is reviewing official files and will explore if there is a possibility of cancelling a power supply contract linked to the Adani Group, reported the news agency Reuters, quoting Finance Minister of the State, Payyavula Keshav, on November 26. 

Andhra Pradesh's state government was “digging into all the internal files” from the previous administration, under which the alleged misconduct occurred, Keshav told the news agency on Monday.

“We will also examine what can be done next, like is there a possibility to cancel the contract ... state government is looking into this issue closely,” said the minister, as per the report.

Adani Group's spokesperson did not immediately respond to the agency's queries about this development. 

The indictment release from the US authorities also said that after payment of the alleged bribes to the Indian officials, Andhra Pradesh's electricity distribution companies entered into a power supply agreement to purchase “approximately seven gigawatts of solar power, by far the largest amount of any Indian state or region,” reported the agency.

The YSR Congress Party, the previous ruling party of the state, denied any wrongdoings last week.

French oil major TotalEnergies, which has a 20 per cent stake in Adani Green Energy Ltd, paused further investment in the Adani Group on Monday. The US authority's crackdown is one of the biggest setbacks for the Adani Group since the release of the Hindenburg report on Adani in January 2023. 

Adani Enterprises Ltd shares fell 3.51 per cent during Tuesday's trading session as of 2:46 pm to ₹2,178.40, compared to ₹2,257.65 at the previous market close.

US Indictment

This move from the State of Andhra Pradesh comes as Gautam Adani, the chairperson of the Adani Group, has been indicted in the United States in an alleged bribery case. 

The US Securities and Exchange Commission has charged Gautam Adani, Sagar Adani, and others for alleged bribery and fraud. These people were allegedly involved in a $265 million payment to unnamed Indian government officials between 2021 and 2022 in hopes of bagging solar power-supply projects in Odisha, Tamil Nadu, Chhattisgarh, Andhra Pradesh, and Jammu and Kashmir. 

According to the SEC indictment cited by the news agency, most of the alleged bribes out of the $228 million were paid to a government official to get Andhra Pradesh's state electricity distribution companies to agree to purchase power from the Adani Group.

Adani Group officially denied the allegations, calling them baseless, on November 21.