Breon Peace, the US Attorney for the Eastern District of New York who unsealed the indictment, is likely to end his tenure with President Biden’s.
New Delhi: The indictment unsealed on 20 November against businessman Gautam Adani’s group and other individuals by the United States Attorney’s Office has come under questioning over the timing of its release, which comes even as the present political dispensation led by President Joe Biden was at most a caretaker government and is in the last 60 days of it being in power after being defeated in the elections.
Breon Peace, the US Attorney for the Eastern District of New York (EDNY) who unsealed the indictment, is likely to end his tenure with President Biden’s. US attorneys, including Peace, are appointed by the President and confirmed by the Senate, serving at the President’s pleasure. Peace was appointed by Biden and confirmed in 2021
Significantly, this is the first enforcement action by the US Securities and Exchange Commission (SEC) against an individual since October 2020 under the Foreign Corrupt Practices Act (FCPA). The FCPA is a US law that prohibits companies and individuals from engaging in bribery or corrupt practices with foreign officials to gain business advantages.
What adds layers of complexity to this situation is that, in addition to causing a Rs 22 billion loss in Adani Group’s share value and the termination of two Adani contracts by the Kenyan government, the Department of Justice’s (DoJ’s) own submission reveals that the alleged bribery scheme took place between 2020 and 2024—a period that coincided with the Biden presidency. Despite this, the DoJ chose to make the proceedings public only now, just days after Gautam Adani announced his intention to invest $10 billion in US energy security and resilient infrastructure, potentially creating up to 15,000 jobs that could benefit the incoming Donald Trump administration. After this indictment, the chances of the business conglomerate operating in the US in the near future are extremely remote.
Neither the Department of Justice nor the SEC has stated why they unsealed the indictment now, in an alleged corruption ring that was running for the last four years.
The fact that the DoJ, the Federal Bureau of Investigation (FBI), and the SEC have quoted closed-door meetings and incidents that allegedly took place in India involving Gautam Adani and other accused suggests that many of the inputs that led to the building up of these alleged revelations were likely supplied by company officials or one of the defendants who is likely to turn approver or a disgruntled bureaucrat.
As per these documents, Sagar Adani, the 30-year-old nephew of the billionaire tycoon, who joined the Adani Group in 2015 and is overseeing strategic and financial matters for Adani Green Energy, was issued a search warrant in March 2023 by FBI Special Agents and was also served with a grand jury subpoena. Pursuant to the judicially authorized search warrant, the FBI special agents took custody of electronic devices in his possession, which allegedly led to the WhatsApp message being discovered about the alleged bribery scandal.
This discovery made under this search warrant that was handed down in March 2023, more than 20 months ago, as per the documents, forms the main source of these allegations of bribery. This could not have happened unless the FBI was directed by someone to search Sagar for his alleged role in this alleged bribery, something which indicates the involvement of Indian officials who were secretly roped in by the US agencies.
Interestingly, the DoJ has stated that for “sake of transparency and good governance,” in August 2022, the defendants caused the US Issuer’s Board of Directors (Adani Green, which in September 2021 offered $750 million worth notes) to initiate an internal investigation run by a law firm headquartered in the United States and supervised by a sub-committee of the Board of Directors. However, that has been termed as “false appearance” by the Adani group.
The DoJ has also stated that “as a part of the ‘Obstruction Scheme’ to withhold key information about the Bribery Scheme, including the plan to pay millions of dollars to the Indian Energy company, a few of the defendants including—Cyril Sebastien Dominique Cabanes—a French citizen and resident of Singapore who was previously a member of the board of directors of Azure Power Global Limited (a Mauritius company with its principal place of business in India), Saurabh Agarwal, Deepak Malhotra, Rupesh Agarwal, and Co-Conspirator 1 (Gautam Adani) made and agreed to make certain selective disclosures in connection with the internal investigation and the Government Investigations—namely, revealing the defendants Gautam Adani, Sagar Adani’s, and Vneet Jain’s requests for bribe money.”
In other words, the DoJ has stated that Gautam Adani himself initiated an internal investigation by a US-based law firm, which has not been named, and during this investigation, Adani disclosed his own role in the alleged bribery.
The DoJ had called this “strategy” “designed to create the appearance that the co-conspirators were reporting misconduct rather than perpetrating misconduct, which, in turn, aided the co-conspirators.”
Last month, the Mohammad Yunus-led Bangladesh government had announced that it will investigate the kind of contracts that have been signed between the Adani group and the Bangladesh government under Prime Minister Sheikh Hasina, indicating the hostile attitude that the government in Dhaka, which has been brought to power by the Biden government, was going to adopt.
In November 2017, Adani Power (Jharkhand) Ltd (APJL) had signed a 25-year, 1,496 MW (net) Power Purchase Agreement with the Bangladesh Power Development Board. Under this, Bangladesh would buy 100 per cent electricity produced by AJPL’s Godda plant.
After the indictment was released, Kenyan President William Ruto directed the Transport and Energy department to terminate the ongoing public-private partnership discussion with Adani Group Holdings.
This rapid U-turn by the Kenyan President came just hours after the representative of the energy department, while appearing before the Senate Committee on Finance on Thursday, defended the government on the Adani engagement amid court battles. The government officials, representing Ruto, had told the committee that due diligence had been done on the Adani Group. “On the matter of Adani’s indictment, under Section 41 of the Private Public Partnership (PPP) Act, we have an elaborate mechanism for undertaking due diligence. The PPP Directorate domiciled under the Treasury in coordination with Kenya Electricity Transmission Company Limited (KETRACO) conducted a due diligence exercise on Adani Energy Solution in two phases,” the official had stated.