Montreal          The outlines of the scandal engulfing the Adani group companies continues to reverberate, and does so nowhere more than in the Canadian province of Quebec.  The US Justice Department and the Securities and Exchange Commission (SEC) have indicted Gautam Adani and his son, alleging a $270-million bribe involving their huge solar contract in India.  Reports are widely characterizing this as the biggest financial scandal in India’s history.  It is also one of the biggest scandals in Quebec, and the Canadian government has also followed with its own actions after the US made its indictments public.

The Canadian connection to this scandal involves CDPQ, one of Canada’s largest institutional investors.  ACORN’s Research Director, who is based in Toronto, broke all of this down for us:

• CDPQ or in English, the Quebec Deposit and Investment Fund manages several public pension plans and insurance programs in the province.
• CDPQ has direct investments of over $1 billion in different Adani holdings and enterprises.
• CDPQ was also the lead investor in Azure Power, the company at the centre of the bribery indictment against Gautam Adani. U.S. prosecutors allege that defendants including Adani, one of the world’s richest people, promised to pay more than $270 million in bribes to Indian government officials to win solar energy contracts, and that they concealed the plan as they sought to raise money from U.S. investors.
  • Three former employees of Caisse de Depot et Placement du Quebec were charged with conspiracy to violate the Foreign Corrupt Practices Act on Nov. 20. The list of the accused includes Cyril Cabanes, a former managing director in CDPQ’s Asia-Pacific infrastructure unit, as well as Saurabh Agarwal, former managing director in India, and Deepak Malhotra, ex-infrastructure director for South Asia. All three were arrested and charged in Canada.
  • CDPQ invested a total of about $480 million in Azure, according to calculations made by Bloomberg. Azure shares have been delisted from the New York Stock Exchange and now trade over the counter, having lost almost all of their value.

In short, they were at the hub of what seems to have been the conspiracy.

Quebec isn’t alone in dealing with this stain on its reputation and concern from its pensioners, largely all public employees.  The Ontario Municipal Employees Retirement System (OMERS) is a Canadian public pension fund, headquartered in Toronto, Ontario was the second largest shareholder in Azure Power, where the deeds took place, with over a $200 million investment.  The British Columbia Investment Management Corporation is an investment corporation in the Canadian province of British Columbia. They manage pension funds for 780,000 public sector employees as well as insurance fund for BC’s provincially-owned owned auto insurance company as well as some endowments and are into six Adani funds for about $7 million.  CALPERS, the big public employee fund in the US is also into Adani.

The CDPQ says it fired the three in 2023, likely when they started having to spend all of their time dealing with the DOJ and SEC.  Both of course lost a lot of their pensioners’ nest eggs as the bribery charges have been make public and are facing questions about why they didn’t do more to advise investors from jump street.  All of which is decreasing confidence and increasing anger.

Sri Lanka, Kenya, and the French company, Total Energies, have all announced that they have either canceled projects with Adani or put them on pause.  We have to wonder when the announcement will be made that they have cashed out everything they have in Adani as the fire sale continues and one shoe after another drops like a rock?