Congress Party’s Many Disruptions In The Parliament Asking For Strict Scrutiny On Adani Group Has Its Own Leader Caught In The Bribery Net. Will Adani Opt For “Settlement” To Shield Adani Group From Further Public Scrutiny?

The U.S. Securities and Exchange Commission (SEC) has alleged that Gautam Adani, chairman of the Adani Group, met Andhra Pradesh Chief Minister Jagan Mohan Reddy in August 2021 to resolve the state’s hesitation in signing a deal with the government-run Solar Energy Corporation of India (SECI). According to court filings, “incentives” (a polished word for bribes) were discussed during the meeting to secure Andhra Pradesh’s cooperation.

The SEC claims that Adani either paid or promised a bribe to Andhra Pradesh officials to finalize power supply agreements with SECI. The allegations mention a massive ₹1,750 crore bribe, directed at an unnamed Andhra Pradesh official referred to as “Foreign Official #1.”
Interestingly, shortly after this alleged meeting, Andhra Pradesh signed an agreement to procure seven gigawatts of solar power—the largest solar procurement deal ever made by a state.

The SEC didn’t stop there. It accused the Adani Group, along with Azure Power, of conspiring to pay $265 million in bribes to state electricity officials in Andhra Pradesh, Chhattisgarh, Tamil Nadu, Odisha, and Jammu and Kashmir. These bribes, allegedly paid between 2021 and 2023, were reportedly aimed at pushing power supply contracts after SECI struggled to find buyers for 12 gigawatts of solar electricity awarded to Adani and Azure in 2020.

YSRCP Denies, TDP Chooses Silence

Jagan Mohan Reddy’s YSR Congress Party (YSRCP) has flatly denied the allegations, claiming that Andhra Pradesh’s government had no direct agreement with the Adani Group. The party emphasized that the deal was between SECI and the state’s power distribution companies (Discoms), approved by the Andhra Pradesh Electricity Regulatory Commission in November 2021 and finalized in December of the same year.

YSRCP also highlighted the financial benefits of the agreement, stating that SECI agreed to supply solar power at ₹2.49 per kWh for 25 years, potentially saving the state ₹3,700 crore annually.

In contrast, the Telugu Desam Party (TDP), now the ruling party, has stayed largely mum on the issue. TDP spokesperson Kommareddy Pattabhiram simply said they needed “two to three days” to study the report before commenting.

–The question that pops up is why the hesitation?
–The ruling TDP has been unusually cautious in commenting on the allegations. Considering political parties rarely miss a chance to target their opposition, what’s holding them back?

Congress’s Caught?
The Congress Party, especially its prominent leaders like Rahul Gandhi, has been vocal in demanding action against Adani. But with one of their own leaders now caught in a bribery scandal—what do they have to say now?

If one were to put this out bluntly, Congress’s strategy of attacking Adani has now hit a significant roadblock, exposing the party to allegations of hypocrisy. How can they call for accountability from others while they face with corruption allegations within their own ranks?
Congress leaders have been relentless in Parliament, demanding answers from Adani. But with one of their own in hot water, is it time for them to answer some tough questions themselves?

More Details

Meanwhile, the Power Supply Agreements (PSAs) by Andhra Pradesh’s electricity distribution companies are under scanner in the $265 million bribery case unearthed by the U.S.

“Sagar Adani had a subsequent meeting with the Chief Minister on September 12, 2021. Post these meetings, the Adanis (Gautam and Sagar) paid or promised a bribe to AP government officials to cause the relevant Andhra Pradesh government entities to enter into PSAs with SECI for the purchase of 7,000 MW of power capacity. Adani Green’s records and later statements by Adani Green executives to the Azure Chairman indicated that the AP bribe payment was approximately $200 million (₹1,750 crore). Shortly after these meetings, Andhra Pradesh agreed in principle to execute a PSA with SECI that would directly benefit Adani Green and Azure” the SEC stated.

Within a couple of weeks, the A.P. government was quoted as saying, “In the Cabinet meeting held last month, it was decided to accept SECI’s offer. After deliberation, the State decided to tap 7,000 MW in the first phase.”

Now the most important question what strategy will Gautam Adani undertake to ride through this latest allegation will Adani opt for “Settlement” to shield Adani Group from further public scrutiny?

With U.S. prosecutors charging several Adani Group executives with bribery, corruption, and fraud, a long legal battle could be on the horizon. However, legal experts suggest that pursuing a settlement might offer an alternative path, albeit a costly one.
While the group has firmly denied these allegations as “baseless” and indicated plans to pursue all legal avenues, it must be noted that there’s been no mention of exploring a settlement.

Still according to legal professionals, opting for a settlement could help avoid the grind of a prolonged trial and mitigate immediate reputational and financial losses.
Shiv Sapra, a partner at Kochhar & Co., explains: “A settlement avoids the rigors of a protracted trial and puts the issue to rest, subject to stricter future compliance. However, it may create a perception of guilt, even with no-admission clauses commonly included in such agreements.”

Balancing Reputation and Legal Strategy

For a global conglomerate like Adani, the stakes are very high and settling might provide temporary relief from public scrutiny and allow the group to minimize reputational damage.

As Supreme Court advocate Tushar Kumar notes, FCPA (Foreign Corrupt Practices Act) settlements often result in civil resolutions rather than criminal convictions. This approach could shield executives from harsher penalties like extradition or custodial sentences.
However, settlements come with their own baggage. Even though they don’t amount to a formal admission of guilt, they can still be interpreted as acknowledgment of wrongdoing. This tightrope between safeguarding reputation and adhering to legal strategy is critical for a group operating on a global scale.

What About Indian Regulators?

While U.S. laws allow settlements under the FCPA, India lacks a similar framework for bribery charges. Nevertheless, Indian authorities could still initiate inspections to determine if there were any related lapses or non-disclosures to domestic investors.

“Settlement neither implies admission nor rejection of charges. It’s a remedy that allows the accused to regularize alleged wrongdoings with penalties, while retaining the right to appeal.”

What Does “Settlement” Imply In U.S. Courts?

To really understand the “settlement” route one needs to gain a bit of perspective of how it works in the U.S Courts.

Corporate settlements in U.S. courts have a long history that reflects a balance between enforcing the law and resolving disputes efficiently.
Over the decades, settlements have become a common resolution mechanism, particularly in complex corporate cases involving financial fraud, antitrust violations, environmental damages, and violations of laws like the Foreign Corrupt Practices Act (FCPA).

The Evolution of Corporate Settlements

Settlements were primarily seen in civil disputes, often involving contract breaches or antitrust matters. The Sherman Antitrust Act (1890) paved the way for enforcement actions, and corporations began settling to avoid lengthy trials and potential dissolution.

1930s – With the creation of the Securities and Exchange Commission (SEC) during the Great Depression, settlements started to feature prominently in cases involving securities fraud. The SEC encouraged settlements to protect investors and restore market confidence without overburdening courts.

1977 – Foreign Corrupt Practices Act (FCPA) – This landmark legislation criminalized bribery of foreign officials by U.S. companies. Settlements under the FCPA often involve fines, disgorgement of profits, and the implementation of compliance measures. This law has led to some of the largest corporate settlements in U.S. history.

1990s – Tobacco Settlements – The Master Settlement Agreement (1998) was a watershed moment, where major tobacco companies agreed to pay $206 billion over 25 years to settle lawsuits brought by states alleging deceptive marketing and public health damages.

2000s – Corporate Scandals – The Enron and WorldCom scandals led to heightened scrutiny of corporate misconduct. The Sarbanes-Oxley Act (2002) introduced stricter regulatory requirements, but settlements remained a tool for resolving violations.
WorldCom reached a $750 million settlement with the SEC.

2008 Financial Crisis – The crisis led to numerous settlements with banks and financial institutions for misleading investors and engaging in risky practices. For Example: Bank of America paid $16.65 billion in 2014 to settle claims related to mortgage-backed securities.

In recent years there has been a substantial increase in record fines and Deferred Prosecution Agreements (DPAs).
Settlements have grown in size and complexity, often involving DPAs or Non-Prosecution Agreements (NPAs), where companies agree to reforms without admitting guilt.

Examples – Goldman Sachs paid $3.9 billion in 2020 to settle charges related to the 1MDB scandal. Volkswagen paid over $25 billion to resolve claims related to its diesel emissions cheating scandal.

Therefore the key features of corporate settlements can include fines, restitution to victims, and disgorgement of profits. At the same time, many settlements include “no admission of guilt” clauses to protect companies from further liability.

There would be an need for increased compliance protocol, implementation of measures like independent monitors, revised policies, and enhanced training programs. However, the route has come under some criticism, critics argue that settlements allow corporations to “buy their way out” of wrongdoing without significant consequences and lack of individual accountability for executives can undermine the deterrent effect.

Also, Settlements often occur behind closed doors, limiting public scrutiny.

The Last Bit,
As things stand, the allegations against the Adani Group remain under the jurisdiction of U.S. laws. However, the ripple effects are bound to raise questions closer to home, especially regarding regulatory oversight, corporate accountability and more importantly the rampant corruption that our political leaders are able to pull in even to this day.

Whether the Adani Group opts for a settlement or decides to fight the charges in court, the outcome will have far-reaching implications for its reputation and future business dealings.

For now, both investors and the public are left waiting, watching how one of India’s largest conglomerates and India’s most well known name Gautam Adani, the magician, dispells the brewing storm!