Settlement may shield Adani Group from further public scrutiny: Experts

Lawyers added that while the US laws allow for settlements in bribery cases, governed by the Foreign Corrupt Practices Act, India does not have any law for settlement of bribery charges

The indictment of Gautam Adani and other executives of the Adani group by the US Department of Justice (DoJ) can be appealed and other legal recourse like settlement route can be explored, but settlement comes with a cost, say legal players.

 

On November 20, US prosecutors levelled bribery and corruption charges against several Adani group executives, alleging that they schemed to pay over $250 million in bribes to Indian government officials, and conspired “to commit securities and wire fraud” to obtain funds from US investors on the basis of misleading statements.

 

The Adani group has denied the allegations as “baseless”, and said that it will seek all possible legal recourse. To be clear, the group has not made any statement indicating settlement.

 

 

Legal players said that though a settlement will provide respite from a long legal battle, it may create a perception of guilt.

 

“A settlement will avoid the rigours of a protracted trial and will put the issue at rest, subject to stricter compliances for the future. In the short term, it may aid in mitigating financial and reputational losses. It could, however, create a perception of guilt, even if partial, especially given the nature of the offences alleged,” said Shiv Sapra, partner, Kochhar & Co.

 

Sapra added that though termed “settlement”, the payment could be in the nature of a “penalty”, which by its own definition involves acknowledgement of wrongdoing.

 

Nilesh Tribhuvann, managing partner, White & Brief, Advocates & Solicitors, shares the same view.

 

“Settling a case can sometimes be misinterpreted as an admission of wrongdoing, despite the 'no-admission' clauses commonly included in such agreements. For a global conglomerate like Adani, maintaining a balance between reputation management and legal strategy is crucial," he said.

 

However, a few others differ and opine that a settlement may shield the executives from further public scrutiny.

 

“Such a course of action may allow Adani to avert prolonged public scrutiny and minimize reputational erosion, which is inevitable during extended litigation. Importantly, settlements in FCPA (Foreign Corrupt Practices Act) cases often culminate in civil resolutions rather than criminal convictions, potentially shielding him and his associates from the severe consequences of extradition or custodial sentences,” said Tushar Kumar, a Supreme Court advocate.

 

Lawyers added that while the US laws allow for settlements in bribery cases, governed by the FCPA, India does not have any law for settlement of bribery charges.

 

However, there is no update on whether the Indian regulatory or investigative bodies will be proving the allegations levelled in the US against the group.

 

“In India as well as in the US, settlement neither means admission nor rejection of charges. Settlement is a remedy under the law, which provides an opportunity to the accused to improve his wrongdoing by regularising it with payment of penalties calculated by the authorities concerned as per law," said Tushar Agarwal, founder & managing partner, C.L.A.P. JURIS, Advocates & Solicitors.

 

Agarwal explained that when an accused settles the matter either in India or in the US, s/he settles it without prejudice to his rights to appeal against the charges.

 

Legal players said the bribery charges in the US are not under the jurisdiction of the Indian markets regulator Securities and Exchange Board of India (Sebi) but the authorities may take up inspections on the possibility of related lapses or non-disclosures to the Indian investors.