Two senior counsels, Mahesh Jethamalani and Mukul Rohatgi, came out in support of Adani Group on Wednesday, November 27, saying that Adani Group Chairman Gautam Adani and his nephew Sagar Adani have not been accused of bribery or obstructing justice in the United States.
Their statements follow the statement issued by Adani Green Energy Limited on the stock exchanges claiming that Gautam, Sagar, and Vneet Jaain have not been charged with any violation of the Foreign Corrupt Practices Act (FCPA) in the indictments set by the US Department of Justice (DOJ) or the civil complaint of the US Securities and Exchange Commission (SEC).
A statement by Adani Group said, “Adani officials are only charged for ‘alleged securities fraud conspiracy’, ‘alleged wire fraud conspiracy’, ‘alleged securities fraud’.
Adani Group stocks soared more than 16% on Wednesday after the group issued the clarification.
However, according to the anti-bribery provisions of FCPA, a person who is a non-US citizen (foreign national) who is not an ‘employee’, 'officer', or ‘agent’ of a US company cannot be charged under FCPA. Foreign firms and persons can only be charged if the bribery, either directly or through agents, takes place within the US.
Though Gautam Adani and his nephew Sagar Adani have not been charged under FCPA, they have been charged under three counts. Moreover, the complaint by the United States Securities and Exchange Commission, which resulted in the indictment, clearly alleges that Gautam Adani held meetings with former Andhra Pradesh Chief Minister Jagan Mohan Reddy. The complaint further says, “At this meeting or in connection with that meeting, Gautam Adani paid or promised a bribe to Andhra Pradesh government officials to cause the relevant Andhra Pradesh government entities to enter into Power Supply Agreements with SECI for the purchase of 7,000 MW of power capacity.” The mere act of ‘offering’ a bribe is a crime under the Prevention of Corruption Act, 1988.
Mahesh Jethmalani, who is also a Rajya Sabha MP, attacked the Congress party for "blindly relying on an indictment" to make "baseless statements" against Indian industrialists and the Union government.
Speaking to the media, he described the indictment as a "conspiracy to halt India's growth story," asserting that the allegations lacked credible evidence.
"It clearly is an attempt, although it emanates from a court in the US... given the nature of the indictment, the sketchy evidence, and some very important circumstances, this seems to be a hatchet job," Jethmalani said. "The indictment only mentions a conspiracy to bribe, but there is no violation of the Foreign Corruption Prevention Act in India," Mahesh added.
Former Attorney General of India, Mukul Rohatgi, told the media that out of the five charges filed, two charges (one on bribery and the other on obstruction of justice) did not name the Adanis, and they were not under FCPA. The advocate, who has appeared for the Adani Group in several cases, said, “When you look at a chargesheet, it must be specific to say that so and so has done such and such act, and so and so has bribed certain individuals. But I do not find a single name or detail in the chargesheet as to who has been bribed in what manner and to which department he belongs. This chargesheet is completely silent; I don't know how one can respond to this kind of chargesheet. But I am sure the Adanis will take legal opinion from US lawyers, he said.
TNM has already reported in-depth about the five counts, what the Adanis are charged with, and the implications when it comes to Indian laws.
Indian advocates pointed out that based on the charges filed in the US court, Indian authorities can investigate under Indian laws like the Prevention of Corruption Act, 1988, Prevention of Money Laundering Act, 2002, Securities and Exchange Board of India Act, 1992, and the Competition Act, 2002.
“The US indictment is credible enough to initiate an investigation. Indian agencies can proceed either suo motu or on the basis of a citizens’ complaint, provided there is a credible source of information,” senior advocate Indira Jaising told Scroll.
Even the Central Bureau of Investigation can start an inquiry as the alleged inducement and corruption instances occurred in India.
In addition, the Securities and Exchange Board of India (SEBI) can also launch a probe related to disclosure violations of publicly traded companies under Listing Obligations and Disclosure Requirements Regulations.
If SEBI finds any regulations have been violated, then they are authorised to levy heavy fines and punish with prison terms. Anurag M Katarki (founder of the Chambers of the Anurag Katarki) told the Leaflet that at present, these are just allegations, and so it is unlikely that SEBI will act on such allegations.
“However, as the matter progresses and if incriminating evidence comes to light, the Securities and Exchange Board of India (SEBI) can commence an investigation under Section 11-C of the Securities and Exchange Board of India Act, 1992, if it has reasons to believe that a transaction is being dealt with in a manner detrimental to the investors or the securities market,” he said.
Indira Jaising also pointed out that the substantial amounts allegedly promised as bribes led to the question of where the money came from. This could also be investigated by the Enforcement Directorate for violations under the Prevention of Money Laundering Act.
In a statement issued after the stock filings by Adani Green Energy Limited (AGEL), the Adani Group said the US Department of Justice indictment offered no evidence that bribes were paid by Adani executives to Indian government officials, and the complaint rested solely on claims that bribes were promised or discussed.
“The ill-founded US action and reckless false reporting have led to significant repercussions for the Indian conglomerate…" the statement read and said that it was in direct competition with US and Chinese entities in Africa, Bangladesh, Sri Lanka, Israel, and Australia.