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US case against India's Gautam Adani appears strong but extradition unlikely, experts say
Reuters
Published 12/16/2024, 01:04 AM
Updated 12/16/2024, 05:17 AM
US case against India's Gautam Adani appears strong but extradition unlikely, experts say
© Reuters. FILE PHOTO: Windmill tubes of Adani Green Energy are loaded on transport trucks along the Ahmedabad-Bhuj National Highway near Bhachau village in the western state of Gujarat, India, November 28, 2024. REUTERS/Amit Dave/File Photo
ADNA
-2.53%
By Luc Cohen
NEW YORK (Reuters) - The U.S. fraud case against Indian billionaire Gautam Adani appears to be backed by documents that will help prosecutors make a strong case, legal experts said, but the tycoon is unlikely to be extradited to stand trial anytime soon.
Federal prosecutors in Brooklyn last month unsealed an indictment accusing Adani of bribing Indian officials to convince them to buy electricity produced by Adani Green Energy (NS:ADNA), a subsidiary of his Adani Group conglomerate, and then misleading U.S. investors by providing reassuring information about the company's anti-corruption practices.
Adani, his nephew Sagar Adani, and another Adani Group executive were charged with securities fraud and conspiracy. Five people affiliated with Azure Power Global (OTC:AZREF), a formerly-U.S.-listed company also allegedly involved, were charged with conspiracy to violate the Foreign Corrupt Practices Act (FCPA).
Azure has said it had cooperated with the investigation and that those charged were no longer with the company. Adani Group has called the allegations "baseless" and vowed to seek "all possible legal recourse."
Gautam Adani is not in custody. He has made at least two public appearances in India since the indictment, including at a Dec. 9 event also attended by Prime Minister Narendra Modi.
According to the indictment, prosecutors found ledgers of the alleged payments on Sagar Adani's cellular phone, which they called "bribe notes." Prosecutors also said Gautam Adani emailed himself a copy of a search warrant and grand jury subpoena the FBI had served on his nephew on March 17, 2023.
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Those electronic records could be important pieces of evidence for prosecutors to try to prove that Sagar Adani and Gautam Adani knew they misled investors by failing to disclose the investigation and insisting they had strong anti-corruption practices when in fact they had paid bribes, experts said.
"The allegations include references to corroborating material, and that always provides for a stronger case," said Stephen Reynolds, a former federal prosecutor and current partner at law firm Day Pitney.
To be sure, prosecutors may face challenges. Gautam Adani could argue that he was not personally involved in crafting the statements the company made to investors about its anti-bribery practices, said Paul Tuchmann, a former federal prosecutor in Brooklyn and now a partner at law firm Wiggin & Dana.
Prosecutors may also struggle to secure live testimony from witnesses in India because the process could require assistance from New Delhi, and the government may be reluctant to facilitate testimony that could paint Indian officials in an unfavorable light, said Mark Cohen, a former federal prosecutor in Brooklyn and current partner at law firm Cohen & Gresser.
India's foreign ministry on Friday referred to a Nov. 29 statement in which it said it had not received any request on the case from Washington, and called the case a matter between private firms and the U.S. Justice Department.
The U.S. Justice Department declined to comment on whether the United States had asked India to extradite Gautam Adani.
'PLAY BY THE RULES'
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Both Adani Group and Adani himself have recently made public statements emphasizing that the conglomerate's executives had not been charged with violating the FCPA.
Conspiracy to violate the FCPA is punishable by up to five years behind bars. The fraud charges Gautam Adani and the other Adani Group defendants face are each punishable by up to 20 years in prison.
Drew Rolle, the deputy chief of the business and securities fraud section at the Brooklyn U.S. Attorney's office, said his office had a responsibility to protect the integrity of U.S. capital markets.
The office has secured a number of convictions in foreign bribery cases with U.S. connections. In August, jurors found Mozambique's former finance minister guilty on fraud and money laundering conspiracy charges for embezzling loan proceeds he had told banks were destined for economic development projects.
Rolle said honest companies are harmed when firms like Adani's allegedly mislead investors.
"It's not only a bribery case, it's an important securities enforcement case," he said at a Dec. 6 conference in New York hosted by the Practicing Law Institute. "If you're going to access our capital markets, you're going to play by the rules."
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