Adani bribery case: Appeals and settlements both on the table, says senior lawyer HP Ranina
Ranina highlighted that both the processes can be pursued concurrently, given the typical time constraints for filing appeals.
According to Ranina, the potential financial repercussions are severe, with fines likely to reach hundreds of millions of dollars, levied separately by the Department of Justice and the Securities and Exchange Commission (SEC). However, he added that the final amounts depend on judicial discretion, which could lean toward either stringent or moderate penalties based on case specifics.
Besides the direct impact of fines, the group might face prolonged challenges in raising funds, particularly in US and European markets. If the group fails to meet its financial obligations, US authorities may move to seize assets, including properties held by the group in the United States. However, such measures would only follow a period granted for compliance, Ranina added.
According to the indictment, Adani allegedly paid bribes to the tune of over ₹2,000 crore, this includes an alleged bribe of ₹1,750 crore to higher ranking official in Andhra Pradesh government who has not been named. US authorities allege Gautam Adani met this Andhra Pradesh official personally to advance the execution of the deal.
In response, Adani has refuted all allegations, calling it baseless, and denied any wrongdoing.
Below are the excerpts of the interview.
Q: Going by past precedents, if you look at the Siemens case of 2008, there, the company had settled the bribery related case with the US Department of Justice and also with the US Securities and Exchange Commission for something like $300 million each. Now, in a case like this, how would the fine be calculated? At what stage can you actually look at settlement? Is settlement even an option right now? Or would they have to file a plea before the US courts and the SEC to see if that can happen and is agreeable too?
Ranina: Both avenues are open. They will go for settlement at the same time, they will not shut the window of going in appeal. And therefore the appellate procedure will take place immediately, because there may be a time limit for filing an appeal. And once that is done, at the same time, the settlement proceedings can continue. And as you rightly point out, the amount will run into huge figures like $300-$400 million.
This, again, is going to be a tremendous drain on the entire Adani group of companies, and will have their repercussions in India. But to come to your point, certainly all the avenues will be taken care of. And appeal is certainly a very important point.
Q: They will have to settle the case, not just with the Department of Justice, it will have to be separately settled with the SEC. So the fines and the settlement amounts will be separate for both.
Ranina: I agree with you. So it may be $300 million, per jurisdiction or per court, or whatever the figure is. In America, this is left to the judges to decide, and sometimes they impose a very heavy fine, sometimes they impose a reasonable fine. So really it’s very difficult to suggest how it’s going to pan out. But certainly the amount would be huge and therefore it will have an impact on the Indians companies as well, because some of the funds will have to go from India. And apart from that, the other issue is that they will debarred from raising funds from the US jurisdiction, or from a European jurisdiction for a long time to come. That’s another implication, which you must not forget, that there will be debarred from raising funds thereafter.
Q: What does this also mean about their status and their passport status for all the accused in this matter? Can they actually now travel to the United States or any country with which the United States has a legal treaty?
Ranina: I don’t think they should. They can’t take a chance. Certainly, they should not travel to any of those states, because if the creditors move the court they can be arrested.
So I don’t think anybody will take even 1% risk of traveling to any of these countries, either the United States, or countries which have an agreement with the US whereby any person who is accused in the US can be arrested in another country as well. So they will certainly not travel to any of those countries. I’m very sure on that score.
Q: The indictment also mentions that the US authorities will have the power of forfeiture, basically, they can forfeit properties of the accused to make good the bribe amount, or the amount that has been raised from US capital markets, the penalty amount. So can that process of forfeiture begin right away? For example, Azure, if it has some property in the United States, or if the Adani group has some property in the United States, can the US authorities, the Securities and Exchange Commission and the US Department of Justice, start forfeiting those properties?
Ranina: I think they will forfeit only if they are not able to pay up. So they will be given a chance. First of all, the amount will have to be crystallised. They will be given a certain number of weeks to pay that money. And in case they are not able to pay then, of course, the possibility of forfeiture is definitely there. So the risk of forfeiture is there to the extent of the assets which are lying in those countries.
Q: We will also see some major changes in the US Justice Department, the SEC after the 20th of January. Will it be possible that a new administration in the US may look at this any differently, or you feel that it is unlikely that the political establishment may intervene in a matter which has gone to the US courts and it is at a very advanced investigation stage.
Ranina: I think it’s very difficult to answer that question, but everything is possible. That’s all that I would like to say. Politically, yes, they can. Now, they have appointed a new attorney general who is very close to the President elect. And certainly it can be done if they want to. So it’s very difficult to answer that question, but I think the courts, if they left to themselves, will allow the law to take its own course, and whatever fines or imprisonment or whatever other service that they want to give that will be done by the courts.
As far as I know, courts do not allow for interference, but one can never say what happens, because there have been cases where politically they have done something – as you know the judges there are politically appointed. They are not independent, as they are in India. And therefore, wherever there are political appointments, they are bound to be some issues involved.
Q: Do you expect the US Department of Justice, the US court in New York, and also the SEC to ask all the accused to pay a certain amount immediately? What do you think happens next in this case, and whatever penalty that will be imposed by the courts, how is that exactly calculated?
Ranina: The calculation is based on the amount of loss which any investor may have suffered. As I said, it is possible that a class action suit may be brought in by some of the affected parties against the Adani group, saying that they had not disclosed certain information which they ought to have done at the time when they made the issue. So that issue will happen, possibly. As far as the amount is concerned, it is really based entirely on the quantum which has been raised. But there again, the courts, the judges in the United States have a lot of discretion, and depending upon the circumstances of each case, they may impose the same amount, a lower amount, or even a higher amount. So it’s very difficult to quantify. But the first step is they must quantify the amount, and thereafter they can take whatever steps they need to take to recover the same.
