Congress MP Manish Tewari calls for JPC to investigate US indictment against Adani Group
In an interview with CNBC-TV18, Tewari also called for a closer examination of the role of Indian regulators, particularly SEBI, questioning whether they were aware of the ongoing US investigation and why they did not take proactive steps to ensure transparency.
He emphasised that the allegations, which involve bribery of Indian officials, have serious implications for India’s reputation as a transparent and ethical business destination, and the Government of India must address them seriously.
A US court has indicted Gautam Adani, his nephew Sagar Adani, and several other officials for allegedly bribing Indian government officials to secure solar energy contracts.
The indictment claims that Adani paid over ₹2,000 crore in bribes, including ₹1,750 crore to a senior official in the Andhra Pradesh government, who has not been identified. US authorities allege that Gautam Adani personally met with this official to facilitate the deal. The Adani group is also accused of hiding information regarding an FBI investigation to Indian financial institutions and investors.
The indictment states that in March 2023, Sagar Adani’s electronic devices were seized, and Gautam Adani was notified of the probe at the same time.
In response, Adani has refuted all allegations, calling it baseless, and denied any wrongdoing. Adani went on to say, the defendants are presumed innocent until proven guilty.
Below are the excerpts of the interview.
Q: How do you see the opposition taking this up in the upcoming session of parliament? This is definitely going to be a big issue, but how do you plan to raise it? Will you be seeking a reply from the finance ministry on this as well?
Tewari: I think it would be important to point out that these allegations are extremely concerning, and these are not allegations now, this is an indictment. Therefore the prosecutors in the United States, both the prosecutors in the Eastern District Court of New York and the Securities and Exchange Commission (SEC) seem to have found enough prima facie evidence to be able to present an indictment in court. So therefore, the matter is very serious. It has ramifications and repercussions not limited to a particular company or to the Adani group of companies, but has a bearing on the overall reputation of India as a business destination, India as a business hub.
Therefore, under those circumstances, it is important that the government takes these allegations extremely seriously, because the charge is the alleged bribery of Indian officials. So therefore government of India ought to take this very seriously because it does not really concern one particular entity or one business group, namely the Adani group of companies, but has an overall bearing on how India would be viewed by the rest of the world, as a business destination where business practices are transparent, open and are conducted with a degree of integrity.
Q: One question that is coming to our mind is about the kind of fine that the Adani group, the Azure Power group and others accused of this case may have to pay up. What we are given to understand that this could be a hefty fine, in case you try and go for a settlement, and even then, you may not be off the hook completely. The fine could be anywhere, it could be decided basis the bribe given in India, and also the capital that you’ve raised from the US markets. Could you give us a sense of what could be the actual cost penalty for the accused involved, and how it will be calculated going forward?
Tewari: I think there’s an implicit assumption that there would be a plea bargain. The plea bargain really depends as to whether the prosecutors are interested in settling or not. So therefore, eventually it would go to a court, and a court will have to adjudicate on the merits of the case. So therefore it’s a two-step process.
Presuming, hypothetically, if somebody was to go down the path of a plea bargain, first of all, where a plea bargain is at all going to be acceptable to the prosecutors, and number two, even if it is acceptable to the prosecutors, will the judge or the judges in question be willing to adjudicate on that offer? So I think there are lots of ifs and buts at this point in time, and therefore it’s a legal process, it is a trial, and the trial will obviously play itself out into concurrent jurisdictions. If my information is correct, or if the indictments which are available in the public space are correct, there seem to be two separate indictments, one by the US Attorney for the Eastern District of New York, and the other by the Securities Exchange Commission.
Q: In this case, the Foreign Extortion Prevention Act (FEPA) has also been applied, which gives the US authorities the power to move against government officials. Currently, they’ve not named the Andhra Pradesh government official to whom a bribe was allegedly offered, but at some stage, they can even summon government officials involved. Do you feel that the Indian government and all the businessmen accused involved in this case will now have to start engaging with US authorities on this case? Will this case also be taken up diplomatically?
Tewari: I frankly am not aware of the FEPA which you referred to. So that’s something which will have to be studied. But eventually it is now up to those people who have been named in the indictment and their lawyers as to how would they really like to approach this matter, and how would they like to take it up before the courts in the United States.
But suffice to say, the concerns have been deeper and profound going back to the Hindenburg revelations. If you do recollect, we had done a conversation on that, and at that point in time, also I had said that a joint parliamentary committee (JPC) needs to be constituted in order to go into not only the allegations which came out in the Hindenburg report, but more importantly, the credibility, the integrity, the processes which our market regulator follows, because it is ironical that while SEBI to a very, very great extent, has been giving a clean chit even earlier when the Hindenburg report was being judicially adjudicated, the Securities and Exchange Commission in the United States has found enough prima facie evidence to proceed against this Indian entity, namely the Adani group of companies. So to that extent, anybody who has been indicted is correct when they say that you are innocent until proven guilty. But as I was earlier pointing out that the joint parliamentary committee is actually the need of the day, because it is not only a question of one particular entity. It is as to how this is going to have a bearing on India’s entire business environment. Number two, more importantly, what about our own regulators? Were our regulators really not aware or they deliberately chose not to exercise oversight. So therefore there are very, very disturbing questions which arise and under those circumstances, since the only authority which exercises oversight over the regulators is Parliament or Parliament through the standing committee, parliamentary, standing committee of finance, it would be appropriate that this entire matter be examined by a joint parliamentary committee, because your concerns are not limited to one geography alone. There are concerns which have emanated from other geographies also.
Q: Can we assume that the parliamentary committee on finance would now like to summon SEBI officials to understand whether they were aware of these allegations and this investigation in the US?
Tewari: I can’t second guess what the parliamentary standing committee would do or would not do, because eventually that is something which the committee would have to collectively decide. I think the appropriate person to address this question to would be the chairperson of the parliamentary standing committee of finance. He would be in a better position to answer it. But suffice to say that I think given the ramifications involved, it would be appropriate if this matter is dealt by a joint parliamentary committee. I remember two years back, I had written an op-ed in a leading newspaper where I had forcefully argued and articulated the need for setting up such a committee, and therefore, under those circumstances, that should be the way forward.
Q: This investigation has been going on for the last two to three years. Azure Power, one of the accused, has told us in a statement that they have been following this investigation, and the directors mentioned have left the company. They said they don’t deny or contest the charges, at least in the media reports. As far as the Adani group is concerned, they have said that these are baseless charges, and they deny it altogether. But having said that, considering this investigation was going on in the United States, was it incumbent on these companies to also inform Indian authorities? The Hindenburg report was also before the Supreme Court. Was it incumbent before the Adani group to keep the Indian authorities, the Indian market regulator informed about this investigation?
Tewari: More importantly, the regulator should have exercised his or her authority in order to find out as to what really was going on with its counterpart in the United States and with the concurrent criminal investigation which was playing itself out. Going by the indictment, it seems that these reports were available in the public space. So therefore, obviously the company needed to keep the Indian regulator in the loop. But that’s one part of it. The regulator, on his or her own, was actually supposed to do the due diligence and ask the company what is really going on and transparently kept not only the investors but also the nation in the loop with regard to whatever allegedly was playing itself out in the United States of America.
