Long way before charges against billionaire Gautam Adani are framed

The US Department of Justice (DoJ) indictment of billionaire Gautam Adani, his nephew Sagar, and six others, though crucial, still marks only a preliminary step in the entire judicial process, lawyers familiar with the US legal system said.

"Indictment just makes out a prima facie finding that the case is worth being taken to trial. It is not a conviction, and the accused remains innocent until proven guilty," said a top lawyer. The actual case is yet to unfold and proceedings before a jury can only determine the outcome based on the evidence presented, the lawyer added.

According to senior advocate Percival Billimoria, a New York grand jury performs an accusatory as well as an investigatory function - the idea being to determine whether there is "probable cause" of an offence having been committed.


However, a grand jury process cannot be used to obtain further evidence against persons already indicted nor for pre-trial discovery, he said.

"This indictment alleges schemes to pay over $250 million in bribes to Indian government officials, to lie to investors and banks to raise billions of dollars, and to obstruct justice," said a press statement issued by the US Attorney's Office, Eastern District of New York.

Raising money for these projects in the US by promising that the company abided by anti-bribery laws, according to the US Department of Justice and the US Securities and Exchange Commission (SEC), constitutes fraud under its securities laws.

The New York courts will have jurisdiction as the SEC violations and criminal offence have taken place in its territory. Allegations are that Adani and the others have defrauded US investors by raising capital on the basis of false statements about bribery and corruption, while other defendants allegedly attempted to conceal the bribery conspiracy by obstructing the government's investigation.

Material Proof?
"There is no material evidence in the 54-page order. Just to allege that the Adanis had misled them into having taken robust measures against bribery is not enough. The DoJ cannot compel someone to testify or appear before them," said a lawyer, declining to be named.

Lawyers added that the US authorities have levelled bribery charges against the Adanis under the US SEC regulations, as the Foreign Corrupt Practices Act (FCPA) applies to US residents-citizens, residents, and nationals-who engage in corrupt practices on a foreign soil.

"It is noteworthy that there are charges of Securities and Wire Fraud and also obstruction of investigation," said Billimoria, adding that grand jury subpoenas can be issued only within the US. A subpoena is a call by the judicial authority to the accused to testify before it.

Amit Mishra, founder, Svarniti Law Offices, said two parallel proceedings have been initiated against Adani Green energy. One is a criminal charge of bribery and the second is a civil complaint brought by the SEC on grounds of misrepresentation and defrauding investors.

Settlement route
However, Adani can resolve these charges, if proved, by opting for a settlement with the SEC and other departments and, on that basis, payoff under no disclosure terms. "A lot of settlements have taken place in the US like this with big companies and banks. They (Adanis), too, can have a no liability settlement and that too without any guilt," said a lawyer.

An indictment in the US is essentially a formal notice issued by a grand jury against a party believed to have committed a crime. The proceedings take place in complete secrecy and are just between the district attorneys and the jury. The accused is summoned for arraignment, where charges are read. The accused can choose to defend through a lawyer.

If the accused does not join the probe after the DoJ asks for its deposition, the trial will proceed before a selected jury, which is a fact-finding body. Sentencing would be done by a judge if charges are proved. Otherwise, the case is dismissed.