How did the Adanis come in the US Justice Department's crosshairs?

ET explains the US Department of Justice's indictments against the Adanis and Azure Power and its implications for the Indian conglomerate and its investors, and the legal course in the United States.

What are the charges of the US Department of Justice against Adani and Azure executives?
Adani Group chairman Gautam Adani and others are alleged to have colluded with executives of a US-listed company, Azure Power, to bribe government officials in India - a punishable crime under the Foreign Corrupt Practices Act (FCPA).


Since Adani is an Indian company, how does this jurisdiction work?
The FCPA in this case primarily applies to Azure. Adani Green Energy, which raised funds from US investors and institutions, is held in violation of various securities laws.

How many charges have been framed?
Under five counts: conspiracy to violate FCPA; securities fraud conspiracy; wire fraud conspiracy; securities fraud, and conspiracy to obstruct justice.

Do all these charges apply against all the eight accused, including Gautam Adani?
Not necessarily. While the FCPA charges and obstruction of justice are focused on the executives of Azure who allegedly erased proof, Adanis face securities and wire fraud in relation to the funds raised.

What is an indictment?
In the US legal system, the investigative agencies hand over their findings to a prosecutor, who must assemble a grand jury - a group of citizens - which needs to be convinced that there's sufficient material to prosecute someone. The charges brought by the grand jury to a court is known as an indictment. The Adanis can contest the charges during the trial.

What are the implications of the indictment?
An indictment of this nature means banks, institutional investors and rating agencies will view Adani assets negatively and private equity investors and SEC-registered investors would face difficulties in doing business with the group.

Does this imply sanctions, visa restrictions etc?
Legally speaking, the US government can question the defendants, issue subpoenas etc. US prosecutors gathered evidence by searching Sagar Adani during a trip to the US and confiscating his mobile device using a judicial warrant.

Can these charges be settled without getting convicted?
Yes, securities and other US laws provide for the accused to negotiate with the regulator and settle them by paying fines and without admission of guilt.