Adani indictment: FCPA cases take long to conclude

It takes an average of about three years to conclude a case after an indictment under the US Foreign Corrupt Practices Act (FCPA), according to a Stanford Law School analysis of cases since the law was enacted nearly a half century ago. The study, which is continuously updated, covered corruption probes against 487 companies and 555 individuals.

The 1977 US law prohibits bribing foreign officials to obtain or retain business. It applies to any person or entity that is subject to US jurisdiction, including foreign companies raising money in the US. Primarily, the US Department of Justice (DoJ) and the US Securities and Exchange Commission (SEC) are responsible for investigating suspected FCPA violations. Both agencies have brought charges against the Adanis.

The Adani group has termed the allegations against its founder Gautam Adani and his nephew Sagar "baseless", adding it will explore all possible legal recourses.

According to the Stanford study, 93% of defendants facing charges under FCPA opted to settle with the SEC rather than contest them in court. However, the settlement ratio with the DOJ was lower at 74%.

The indictment is the first step after concluding an investigation, and the authorities will need to present evidence of wrongdoing to press their case. In cases of settlement, the indicted parties agree to pay a fine without admitting wrongdoing.

Violators paid an estimated total of $11.6 billion in bribes, while the US authorities levied $31 billion in fines. The average fine was $58.3 million. Many individuals also went to jail or were put under house arrest, with an average of 31 months in prison or house arrest.

Adani’s indictment makes it the 26th case from India to be probed under FCPA, behind 34 cases from Brazil and 75 cases from China, and equal to Mexico.

 

On Wednesday, federal prosecutors in New York indicted a total of eight individuals for allegedly paying more than $250 million in bribes to Indian government officials between 2020 and 2024 to obtain lucrative solar energy contracts.

According to the indictment, Adani Green Energy Ltd raised $2 billion from American and foreign investors based on false and misleading statements about the firm's anti-corruption and anti-bribery efforts. For this reason, the DoJ opened a criminal investigation, while the Securities and Exchange Commission is pursuing a civil investigation against Gautam Adani, his nephew Sagar Adani, and Vneet Jaain, chief executive of Adani Green Energy.

In 2019, Cognizant Technology Solutions Corp., a New Jersey-headquartered information technology services company, which counts two-thirds of its employees in India, was charged with bribing Indian officials to fast-track the construction of its offices in India.

Cognizant paid about $28 million to the DoJ and SEC, and its former chief operating officer Gordon Coburn was let go from the company. A case against Coburn continues in the US courts.

Varun Sood contributed to the story.