The indictment of Gautam Adani and senior executives of the Adani Group by United States prosecutors centres around allegations of a $265-million bribery scheme intended to secure lucrative solar energy contracts. Claims of bribery, securities fraud, wire fraud and obstruction of justice have placed the group at the centre of an international controversy.
The Adani Group has denied the allegations, dismissing them as “baseless”.
For those unfamiliar with the US legal system, Scroll breaks down the charges as well as the likely implications of these allegations in relation to Indian law.
US prosecutors allege that, between 2020 and 2024, Gautam Adani and his associates conspired to bribe Indian government officials to secure solar energy contracts for Adani Green Energy Ltd and another energy firm, Azure Power Global Ltd. These projects were projected to generate $2 billion in profits over 20 years.
The indictment – essentially a statement of charges, roughly equivalent to a chargesheet in Indian law – claims that the alleged conspirators misled US investors and financial institutions to raise $3 billion through loans and bonds by suggesting falsely that they were in compliance with US anti-bribery laws. The evidence presented includes text messages, spreadsheets tracking bribes and internal communications.
The Securities and Exchange Commission is central to the case. As the regulator of US financial markets, the commission ensures that US securities laws, designed to protect investors from fraudulent activities, are upheld. It is authorised to impose penalties, recover profits gained through fraud and mandate compliance reforms.
The commission charged Gautam Adani and his nephew Sagar Adani with “violating the antifraud provisions of the federal securities laws”. It also charged Cyril Cabanes, a former Azure director, with facilitating the authorisation of the alleged bribes.
The charges are primarily based on two US law laws: the Foreign Corrupt Practices Act, which prohibits bribing foreign officials from gaining business advantages and the Foreign Extortion Prevention Act, which targets corruption involving foreign governments.
US prosecutors have alleged that Adani and his team obstructed justice by deleting emails and withholding critical evidence during investigations.
The indictment calls for seizing assets gained through criminal activities, including money from bribery, fraud and inflation of company assets by failing to disclose wrong-doing.
The US legal system involves several stages, starting with arraignment, where the charges are formally read and the parties accused must plead guilty or not guilty. This is followed by “discovery”, which allows both sides to exchange evidence. In the pre-trial stage, the court determines what evidence is admissible and whether some charges should be dropped.
If no settlement is reached, where the accused agrees to penalties or improving some practices without admitting guilt, the case will go to trial. Prosecutors must convince a jury of the accused’s guilt beyond a reasonable doubt. At the end of this process, a verdict is delivered.
In the Adani case, a grand jury – a group of citizens that reviews evidence to decide if charges should proceed – was used to issue the indictment, highlighting the seriousness of the allegations. While the grand jury does not decide guilt, its role ensures that there is sufficient evidence to proceed with the case.
Under US law, trial must commence within 70 days from the date the indictment was filed. However, this right can be waived effectively unilaterally by the accused parties before the trial begins in order to secure more time to prepare their defence.
Under the US Foreign Corrupt Practices Act, bribery can result in severe financial penalties and imprisonment, barrister Anurag Mohan Katarki told Scroll.
For companies, each act of bribery may incur a fine of up to $2 million (approximately Rs 16.9 crore). Individuals, such as directors or executives, may face fines of up to $100,000 (around Rs 84 lakh) and a prison sentence of up to five years. If accounting violations are proved, companies could be fined up to $25 million (Rs 200 crore) per violation, while individuals could face fines of up to $5 million (Rs 40 crore) and up to 20 years in prison, Katarki said.
Fines could also be doubled under the Alternative Fines Act of the United States if the offender stands to gain from the crime, Katarki said. This would apply if the accused party pleads guilty or is found guilty by court. In the case of Adani, where Adani Green Energy could have earned $2 billion (Rs. 16,800 crore) in profits, as per the indictment, fines could be as high as $4 billion (Rs. 33,600 crore), Katarki said.
The Securities and Exchange Commission may also take civil action to enforce legal compliance, including recovering dishonestly obtained gains and imposing additional penalties. Violating court orders could result in additional penalties, he explained.
Violating the Foreign Corrupt Practices Act may also lead to collateral consequences, such as losing the ability to contract with the US government or losing export privileges. This could significantly disrupt business operations, Katarki added.
A central issue in this case is jurisdiction. Although the alleged crimes occurred in India, US prosecutors argue that the Foreign Corrupt Practices Act applies because the bribery scheme involved American investors and financial markets. The extraterritorial reach of the act allows US authorities to prosecute non-US entities if their actions have a significant impact on American interests.
The accused parties could argue that these actions should be investigated under Indian law, given their location and context, legal experts told Scroll. International treaties, such as the United Nations Convention Against Corruption, may be invoked to support a collaborative investigation between Indian and US authorities, a corporate lawyer based in India who did not want to be named said.
Reuters and other news outlets have reported that US arrest warrants have been issued for Gautam Adani and his nephew, Sagar Adani. If extradition is pursued, the process would depend on the India-US extradition treaty, which requires that the alleged crimes be recognised as offences in both countries. Indian courts would review the evidence to determine whether it meets the treaty’s requirements.
Extradition proceedings are often lengthy and could delay the legal process significantly. In the meantime, the accused may face travel restrictions, especially to countries that have extradition agreements with the US, lawyers familiar with this area of law told Scroll.
The obstruction of justice charge adds another layer of complexity. US prosecutors allege that key evidence, including emails and documents detailing the bribery scheme, was destroyed or concealed by the accused. Such actions not only hinder investigations but also intensify the severity of the charges. If proven, these allegations could result in additional penalties, including jail time.
US law allows for negotiated resolutions in cases like this, where the accused can avoid trial by agreeing to terms through different types of settlements.
These include deferred prosecution agreements, where charges are paused if the accused meets certain conditions; plea agreements, where the accused admits guilt in exchange for reduced penalties; or non-prosecution agreements, where no charges are filed if the accused complies with specified terms, Katarki said.
“Such an agreement could enable Adani and his associates to avoid trial by admitting some wrongdoing, paying fines and committing to compliance reforms,” he said. “While this option might resolve the case more quickly, it would still require significant concessions and could involve reputational damage.”
At this stage, the allegations against Gautam Adani are just that – allegations – and the US, just like India, follows the principle that “a person is presumed innocent until proven guilty”, Katarki emphasised.
However, he and other legal experts to whom Scroll spoke said that in India, there could be investigations and charges under several Indian laws, including the Prevention of Money Laundering Act, 2002, the Prevention of Corruption Act, 1988, the Securities and Exchange Board of India Act, 1992 and the Competition Act, 2002. These laws could lead to penalties and further legal action if violations are found.
“Indian agencies can proceed either suo motu or on the basis of a citizens’ complaint, provided there is a credible source of information,” said senior Advocate Indira Jaising. “The US indictment is credible enough to initiate investigation.”
A capital markets lawyer licensed to practise in New York and in India who requested not to be named, agreed. “The Central Bureau of Investigation has jurisdiction to start an inquiry because the alleged bribery and corruption occurred in India,” she said.
She said that the Securities and Exchange Board of India could also investigate the case in relation to violations of Listing Obligations and Disclosure Requirements Regulations. These regulations govern the transparency and disclosure requirements of publicly traded companies.
“If what is coming out of the indictment is material information under the purview of the LODR regulations and if SEBI finds that the regulations were violated by the Adani group, then the Adani group and specific individuals could be penalised by SEBI,” she said.
SEBI is authorised to impose heavy fines as well as prison terms for securities law violations.
Jaising flagged another potential grave criminal liability that may arise on the Adani group due to the indictment. “Where did all the money for the alleged bribery come from?” she asked. “There may have been round-tripping of money, which would have to be investigated by the Enforcement Directorate under the Prevention of Money Laundering Act.”
Round-tripping of money is an accounting practice meant to launder money. It involves moving funds through multiple transactions, often across borders, to disguise their origin and return them to their original source.