US Authorities Indict Billionaire Gautam Adani Under Foreign Corrupt Practices Act
Mumbai/Bengaluru: In a stunning move, federal prosecutors in New York have indicted billionaire Gautam Adani and his nephew Sagar under the US Foreign Corrupt Practices Act (FCPA). The indictment has sent shockwaves through Indian business circles and investors are on high alert.
According to an analysis by Stanford Law School, which covered corruption probes against 487 companies and 555 individuals since the law was enacted nearly half a century ago, it takes an average of about three years to conclude a case after an indictment. The study revealed that 93% of defendants facing charges opted to settle with the SEC, while the settlement ratio with the DOJ was lower at 74%.
Adani's group has termed the allegations against its founder and his nephew as "baseless" and vowed to explore all possible legal recourses. However, the indictment marks the 26th case from India to be probed under FCPA, highlighting growing concerns about corruption and bribery in cross-border transactions.
Federal prosecutors in New York have also indicted eight individuals on charges of bribing Indian government officials between 2020 and 2024 to obtain lucrative solar energy contracts. The total value of alleged bribes is estimated to be over $250 million.
Adani Green Energy Ltd, which raised $2 billion from American and foreign investors based on false and misleading statements about its anti-corruption efforts, is also under investigation. Gautam Adani, his nephew Sagar Adani, and Vneet Jaain, chief executive of Adani Green Energy, are among those being probed.
This scandal has echoes with a similar case against Cognizant Technology Solutions Corp., which was charged with bribing Indian officials in 2016. The US government demanded $28 million from the company and its former COO Gordon Coburn is still facing court proceedings.
Investors are watching closely as Adani's indictment signals growing scrutiny of cross-border transactions and potential risks associated with doing business with companies linked to India's major corporations.
As one observer noted, "patience is key" when it comes to the fate of these cases. With an average fine of $58.3 million for past violators and many individuals facing jail or house arrest, those involved in Adani's indictment may soon face a similar reckoning under US law.