Wil intricacies of the law help Adani breathe easy?

Unfortunately for the INDIA Bloc, and much to the relief of tainted Adani conglomerate, the USD 265 million bribery charges in the US against Gautam Adani raises the issue of extraterritorial application of American laws since the Indian tycoon and others involved in the case do not live in US. The civil case by the US Securities and Exchange Commission (SEC), like any other civil plaintiff, must first serve its summons and complaint upon the defendants, and then they will have adequate time to answer the complaint, or if they prefer, move to dismiss the complaint or charges based upon presumption against extraterritoriality.

On close scrutiny of the charges,the (US) Department of Justice indictment clearly says that Gautam S Adani, Sagar R Adani, and others ‘devised a scheme to offer, authorise, make and promise to make bribe payments to Indian government officials in exchange for the government officials causing state electricity distribution companies to enter into PSAs with SECI in para 47. It adds in para 49 that they ‘offered and promised to Indian government officials approximately Rs 2,029 crore (approximately USD 265 million) in bribes in exchange for Indian government officials causing the state electricity distribution companies to execute PSAs. Furthermore, it alleges that Sagar R Adani and Vineet S Jain secretly influenced the SECI, a public sector enterprise under the Union Ministry of New and Renewable Energy process for reallocation of the 2.3 GW PPAs to the Indian Energy Company’s subsidiary.

Although the opposition parties virtually stalled the proceedings in both houses of parliament, asking for a joint parliamentary committee on repeated corruption charges against Gautam Adani and his group, the BJP government simply didn’t budge, and resorted to a counter allegation against opposition for not allowing functioning of parliament. This was not the first time that the Modi government preferred to remain silent on serious corruption charges against the Adani group, and certainly won’t be the last time too. As was expected, the Adani Group has been in denial mode, just like in the case of previous allegations levelled against it by US based researchers Hindenburg. It has said Gautam Adani, and his nephew Sagar Adani had not been charged with any violation of the US Foreign Corrupt Practices Act (FCPA) in the indictment that the authorities filed in the New York court in the alleged bribery case adding that they faced three other charges, including securities and wire fraud that are punishable with monetary fines. Notably, the FCPA makes it a crime for a company or person with US links such as a public listing, American investors or a joint venture to pay or offer something of value to another government’s officials for favourable treatment.

While none of the Adani group firms trade in the US, some of them like AGEL do have American investors invested in equity or debt. The US DOJ and the United States Securities and Exchange Commission (US SEC) have issued a criminal indictment and brought a civil complaint in the US District Court against Gautam Adani, Sagar Adani and Vneet Jaain. The group, as expected, roped in top lawyers like former attorney general and senior counsel Mukul Rohatgi, and Senior Supreme Court advocate Mahesh Jethmalani who confirmed that Adani and his aides have been charged under other Counts which relate to securities and bonds.