Three former executives of Canadian pension fund CDPQ, including a former India head, have been indicted along with Indian billionaire Gautam Adani and four others by US prosecutors for their alleged role in what may have been a case of multi-billion-dollar bribery and fraud, the US Department of Justice said.
Cyril Cabanes, a former managing director of infrastructure for Asia-Pacific at CDPQ; Saurabh Agarwal, the pension fund’s former India MD; and Deepak Malhotra, its former director of infrastructure for South Asia; have been named alongside Gautam Adani, his nephew Sagar Adani and Vineet Jaain for allegedly agreeing to pay $250 million (over Rs 2,100 crore) in bribes to officials in India. The alleged bribe was paid between 2020 and 2024 to win solar energy supply contracts that could yield profits of $2 billion over a 20-year period, the Department of Justice said in a statement.
The indictment also names Ranjit Gupta, formerly the CEO of CDPQ-controlled Azure Power, and Rupesh Agarwal, the former Chief Strategy and Commercial Officer at the green energy firm.
Cabanes had left CDPQ in January this year and is now the chief executive officer at MorGen Energy, according to his LinkedIn profile. Agarwal quit CDPQ in India a little over a year after being elevated to the top job as VCCircle had noted. He had been named managing director for India in March 2022 after the departure of Anita George in January last 2022. According to his LinkedIn profile, he is currently self-employed. Malhotra, too, reportedly left around the same time as Cabanes. It is unclear where he is working right now.
CDPQ is the majority owner of India-based green energy firm Azure Power that was earlier listed on the New York Stock Exchange (NYSE) but has since been delisted from the bourse.
Gupta had quit Azure in April 2021. He was succeeded by Harsh Shah, who quit rather abruptly barely a month after taking over the top job at the company. Shah had cited "unforeseen circumstances and matters beyond his control" for his abrupt departure. Shah went back to joining the KKR-backed InvIT IndiGrid as its CEO. Rupesh Agarwal had been appointed acting CEO in August 2022 after Shah left.
Cabanes, who was on the board of directors at Azure Power, has been charged with violations of the Foreign Corrupt Practices Act (FCPA) for his role in the alleged bribery scheme. Cabanes allegedly facilitated the authorization of bribes in furtherance of the scheme while in the US and abroad, as per a complaint by the US Securities and Exchange Commission.
“According to the SEC’s allegations, the bribery scheme was orchestrated to enable the two renewable energy companies to capitalise on a multi-billion-dollar solar energy project that the companies had been awarded by the Indian government. During the alleged scheme, Adani Green raised more than $175 million from US investors and Azure Power’s stock was traded on the New York Stock Exchange,” the SEC said separately.
Apart from this, the Adani Group’s green energy company is also alleged to have raised bonds and loans worth more than $3 billion allegedly based on false and misleading statements, reports said.
While Gautam Adani heads the Adani Group, his nephew is an executive director on Adani Green’s board.
The SEC complaint says that the Adanis paid or promised to pay hundreds of millions of dollars in bribes to government officials in India to get their commitment on purchasing energy at above market rates, which would directly benefit Adani Green and Azure Power.
The allegations say that the Adanis were engaged in the bribery scheme during a 2021 offering by Adani Green that raised $750 million, of which $175 million was raised from US investors. “The Adani Green offering materials included statements about its anti-corruption and anti-bribery efforts that were materially false or misleading in light of Gautam and Sagar Adani’s conduct,” the SEC said in its statement.
The SEC’s division of enforcement, which is headed by an Indian origin official Sanjay Wadhwa, has alleged that the Adanis induced investors in the US to purchase bonds of Adani Green via an offering that not only allegedly misrepresented that Adani Green had an anti-bribery compliance programme but also that the senior management would not indulge in bribery. Cabanes is alleged to have participated in the bribery scheme while serving as director at Azure, which was then publicly-listed on the NYSE.
The SEC’s complaint against Gautam and Sagar Adani charges them with violating the antifraud provisions of the federal securities laws. The complaint seeks permanent injunctions, civil penalties, and officer and director bars. The SEC’s complaint against Cabanes charges him with violating the FCPA and seeks a permanent injunction, a civil penalty, and an officer and director bar. Both complaints were filed in the US District Court for the Eastern District of New York.
Most Adani Group stocks were down over 10% on Indian stock exchanges in Thursday trade, following these allegations.
