US SEC To Use Diplomatic Channels To Serve Summons To Adani and His Nephew Over Alleged $265 Million Bribery Scheme

The US SEC has no jurisdiction to summon a foreign national directly, so it will have to use the proper diplomatic channels to serve the summons on Adani Group Founder and Chairman Gautam Adani and his nephew Sagar in the alleged USD 265 million (Rs 2,200 crore) payoffs, as reported by PTI.

The US SEC seeks to summon the adanis; however, this request must follow the established protocol of completing other diplomatic formalities and passing through the Indian Embassy in the US.

Such issues are governed by the Hague Convention of 1965 and the US-India Mutual Legal Assistance Treaty. These explicitly outline the standard process that must be adhered to when making such requests. It will take some time before the summons, which is a part of the legal docket that the SEC filed before a New York court, can be served on the Adanis, they stated. Adanis has not yet received a summons.

Adanis is being questioned by the US Securities and Exchange Commission (SEC) regarding allegations that they paid bribes to secure lucrative solar power contracts.

“Within 21 days after service of this summons on you (not counting the day you received it)… you must serve on the plaintiff (SEC) an answer to the attached complaint or a motion under Rule 12 of the Federal Rules of Civil Procedure,” said the US SEC notice of November 21 notice being set through New York Eastern District Court.

“If you fail to respond, judgment by default will be entered against you for the relief demanded in the complaint. You also must file your answer or motion with the court,” it added.

According to an indictment unsealed in a New York court on Wednesday, Gautam Adani, 62, and seven other defendants, including his nephew Sagar, a director at the group’s renewable energy unit Adani Green Energy Ltd, allegedly agreed to pay approximately USD 265 million in bribes to Indian government officials between roughly 2020 and 2024 in order to obtain lucrative solar energy supply contracts on terms that were expected to yield USD 2 billion in profit over 20 years.

The two and Azure Power Global executive Cyril Cabanes have been charged by the US SEC for “conduct arising out of a massive bribery scheme,” in addition to the indictment filed by the US Department of Justice.

The ports-to-energy company has refuted the accusations and stated that it will pursue all available legal options. “In every jurisdiction where it conducts business, the Adani Group has upheld and remains resolutely committed to upholding the highest standards of governance, transparency, and regulatory compliance. We reassure our partners, stakeholders, and staff that we are a law-abiding company that complies with all applicable laws.

An indictment in the US is basically a formal written allegation originating with a prosecutor and issued by a grand jury against a party charged with a crime. A person indicted is given formal notice to reply. That person or persons can then hire a defence lawyer to defend. Prosecutors said the investigation started in 2022 and found the inquiry obstructed.

They allege that the Adani Group raised USD 2 billion in loans and bonds, including from US firms, on the backs of false and misleading statements related to the firm’s anti-bribery practices and policies, as well as reports of the bribery probe.

“As alleged, the defendants orchestrated an elaborate scheme to bribe Indian government officials to secure contracts worth billions of dollars and… lied about the bribery scheme as they sought to raise capital from U.S. and international investors,” US Attorney Breon Peace said in a statement announcing the charges on Wednesday.

“My office is committed to rooting out corruption in the international marketplace and protecting investors from those who seek to enrich themselves at the expense of the integrity of our financial markets.”