New Delhi: Nearly a year after the Azure group hit headlines over a US court indictment for an alleged " bribery scheme" surrounding a 2333MW power project in Andhra Pradesh, the group is readying for a settlement in a US district court, ET has learnt.
Alongside, it is also looking to withdraw from a 2021-era 150MW hybrid project in India due to "economic and execution challenges", the group's latest financial statement reveals. The Azure group has disclosed that it has earmarked $23 million (₹1,945 million) for the class action settlement. The issue is set to come up for a hearing in the US District Court for the Southern District of New York on September 5. Azure has further set aside $2.3 million towards possible forfeiture of bank guarantees that are likely to follow when it exits the 150MW power project in India.
THE SETTLEMENT
The Azure group has been accused of violating the US Securities Exchange Act of 1934, making "false and misleading" statements on compliance with anti-corruption and anti-bribery laws, besides misconduct involved in securing project bids. Substantial damages were caused to investors who had acquired Azure equity shares at "artificially inflated prices due to the misrepresentation and omission of these facts", it is alleged.
Accordingly, rounds of discussions were held and a class action settlement proposal could finally be mediated in January 2025, court records show. The proposal got a preliminary approval from the relevant court in April, following which the group has transferred $23 million into a designated escrow account.
Persons and entities who purchased or otherwise acquired Azure equity shares between January 1, 2020, and November 20, 2024, are eligible for the proposed settlement. The deadline for filing claims for the same was August 29, court documents accessed by ET reveal. "Subject to final approval by the court, the company and the lead plaintiff have agreed to settle the case without any admission of liability by any defendants. The settlement received preliminary approval by the court on April 30, 2025, and the company expects a hearing to address final approval to take place in September 2025. As of March 31, 2025, the company has recognised a provision of ₹1,945 million ($23 million) on account of the above settlement. Subsequently, the company has also transferred the amount in a designated escrow account created as part of the settlement," Azure group's consolidated financial statements for the year ended March 31, 2025 reads.
In the US court, the group has, so far, denied any allegations of wrongdoing and stated that the settlement should not be seen as an admission or concession on the part of the defendants but in view of litigation related risks to investors.
THE SEC INDICTMENT
At the centre of the US indictment is Azure Power suddenly exiting the 2,333MW Andhra Pradesh Power project in early 2024, citing Public Interest Litigations filed against it. The PPA for the same was then transferred to the Adani group by the Solar Energy Corporation of India (SECI), arguably to prevent project failure but SEC has alleged wrongdoing and Azure "secretly influencing" the same. On November 20, 2024, a grand jury in the Eastern District of New York indicted former company directors, former Azure executives, and several other individuals for alleged bribery related misconduct.
Separately, on November 20, 2024, the SEC also brought complaints against Cabanes and others. A class action lawsuit was filed in the US District Court for the Southern District of New York against Azure and its former directors/officers for alleged "violations of US securities laws". The Azure Group, in its financial statement, has underlined that a "Special Committee" set up by it in 2022 to probe whistleblower complaints on the matter has almost completed its report and has found that some ex-employees did make "improper payments" but none were made by the Azure group itself.
The Andhra project apart, the Azure group also went on to exit several other projects triggering a series of lawsuits in India where it is locked in court battles with SECI. The latest is the case of the 150MW solar-wind hybrid project and the associated ISTS Connectivity grant that it now wants to exit due to "economic and execution challenges".
Alongside, it is also looking to withdraw from a 2021-era 150MW hybrid project in India due to "economic and execution challenges", the group's latest financial statement reveals. The Azure group has disclosed that it has earmarked $23 million (₹1,945 million) for the class action settlement. The issue is set to come up for a hearing in the US District Court for the Southern District of New York on September 5. Azure has further set aside $2.3 million towards possible forfeiture of bank guarantees that are likely to follow when it exits the 150MW power project in India.
THE SETTLEMENT
The Azure group has been accused of violating the US Securities Exchange Act of 1934, making "false and misleading" statements on compliance with anti-corruption and anti-bribery laws, besides misconduct involved in securing project bids. Substantial damages were caused to investors who had acquired Azure equity shares at "artificially inflated prices due to the misrepresentation and omission of these facts", it is alleged.
Accordingly, rounds of discussions were held and a class action settlement proposal could finally be mediated in January 2025, court records show. The proposal got a preliminary approval from the relevant court in April, following which the group has transferred $23 million into a designated escrow account.
Persons and entities who purchased or otherwise acquired Azure equity shares between January 1, 2020, and November 20, 2024, are eligible for the proposed settlement. The deadline for filing claims for the same was August 29, court documents accessed by ET reveal. "Subject to final approval by the court, the company and the lead plaintiff have agreed to settle the case without any admission of liability by any defendants. The settlement received preliminary approval by the court on April 30, 2025, and the company expects a hearing to address final approval to take place in September 2025. As of March 31, 2025, the company has recognised a provision of ₹1,945 million ($23 million) on account of the above settlement. Subsequently, the company has also transferred the amount in a designated escrow account created as part of the settlement," Azure group's consolidated financial statements for the year ended March 31, 2025 reads.
In the US court, the group has, so far, denied any allegations of wrongdoing and stated that the settlement should not be seen as an admission or concession on the part of the defendants but in view of litigation related risks to investors.
THE SEC INDICTMENT
At the centre of the US indictment is Azure Power suddenly exiting the 2,333MW Andhra Pradesh Power project in early 2024, citing Public Interest Litigations filed against it. The PPA for the same was then transferred to the Adani group by the Solar Energy Corporation of India (SECI), arguably to prevent project failure but SEC has alleged wrongdoing and Azure "secretly influencing" the same. On November 20, 2024, a grand jury in the Eastern District of New York indicted former company directors, former Azure executives, and several other individuals for alleged bribery related misconduct.
Separately, on November 20, 2024, the SEC also brought complaints against Cabanes and others. A class action lawsuit was filed in the US District Court for the Southern District of New York against Azure and its former directors/officers for alleged "violations of US securities laws". The Azure Group, in its financial statement, has underlined that a "Special Committee" set up by it in 2022 to probe whistleblower complaints on the matter has almost completed its report and has found that some ex-employees did make "improper payments" but none were made by the Azure group itself.
The Andhra project apart, the Azure group also went on to exit several other projects triggering a series of lawsuits in India where it is locked in court battles with SECI. The latest is the case of the 150MW solar-wind hybrid project and the associated ISTS Connectivity grant that it now wants to exit due to "economic and execution challenges".
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