Could Adani Settle With US Accusers?

Though a settlement will provide respite from a long legal battle, legal experts say it may create a perception of guilt.

The charges against 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 experts.

On November 20, US prosecutors levelled bribery and corruption charges against several Adani group executives, alleging that they schemed to pay over $265 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 it will seek all possible legal recourse.

To be clear, the group has not made any statement indicating settlement.

Legal players said 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," said Shiv Sapra, partner, Kochhar & Co.

"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," Sapra added.

Though termed 'settlement', Sapra said 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," said Tribhuvann.

"For a global conglomerate like Adani, maintaining a balance between reputation management and legal strategy is crucial," he added.

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

"Such a course of action may allow Adani to avert prolonged public scrutiny and minimise reputational erosion, which is inevitable during extended litigation," said Tushar Kumar, a Supreme Court advocate.

"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," explained Kumar.

While US laws allow for settlements in bribery cases, governed by the FCPA, the lawyers added 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," said Tushar Agarwal, founder & managing partner, C.L.A.P. JURIS, Advocates & Solicitors.

"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," Agrawa added.

When an accused settles the matter either in India or in the US, Agarwal explained 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 but the authorities may take up inspections on the possibility of related lapses or non-disclosures to Indian investors.

Feature Presentation: Ashish Narsale/Rediff.com