Andhra Pradesh mulls next steps on Adani, if power deal can be scrapped

The Andhra Pradesh state government is currently reviewing its records and exploring the possibility of canceling a power supply contract linked to the Adani Group following serious allegations from the United States. U.S. authorities have indicted Gautam Adani, the founder of the Adani Group, and several others for allegedly paying $265 million in bribes to Indian officials to secure solar power supply contracts across various states, including Andhra Pradesh.

Key Developments:

1. Allegations of Bribery: The U.S. indictment claims that the bribes were paid to Indian government officials to obtain contracts for solar power supply, with the largest portion of the alleged bribes—$228 million—allegedly going to secure an agreement with Andhra Pradesh’s electricity distribution companies. The bribes are said to have facilitated the purchase of about seven gigawatts of solar power, the largest such deal in India.
2. Andhra Pradesh Government’s Response: Following the indictment, Andhra Pradesh’s Finance Minister, Payyavula Keshav, revealed that the state is reviewing all internal documents related to the previous administration, under which the alleged bribery occurred. The government is considering whether there is a legal path to cancel the contract with the Adani Group.
3. Previous Administration’s Denial: The YSR Congress Party, which governed the state at the time, has denied any wrongdoing regarding the deal, maintaining that the power supply agreement was legitimate.
4. Global Repercussions for Adani: The charges have already had a significant impact on the Adani Group, leading to a sharp decline in the value of its shares and bonds. Additionally, TotalEnergies, a French oil major with a 20% stake in Adani Green, has announced that it will halt further investment in the Adani Group in light of the charges.
5. Adani’s Denial: Gautam Adani and the Adani Group have strongly denied the allegations, claiming the charges are baseless.

Conclusion:

The Andhra Pradesh government is taking the charges seriously and is actively reviewing the situation to determine possible next steps, including the potential cancellation of the solar power supply contract with the Adani Group. These developments are part of a larger fallout for Adani, whose business empire is facing significant scrutiny following the U.S. bribery indictment.