A United States court has dismissed securities and wire fraud charges against Indian industrialist and billionaire Gautam Adani and two other executives, bringing the criminal proceedings against them to an end..Judge Nicholas G Garaufis of the US District Court for the Eastern District of New York on August 11 accepted the proposal of the US Department of Justice (DOJ) to dismiss all three charges brought against Gautam Adani, Sagar Adani and Vneet Jaain - securities fraud conspiracy, wire fraud conspiracy and securities fraud. However, Judge Garaufis expressed concern about the manner in which the DOJ made the proposal and termed it "highly unusual"."The fact that McCotter came to this decision largely in collaboration with defense counsel, and seemingly without input from the FBI and SEC agents who investigated the alleged misconduct, or the attorneys from the Department, SEC, and U.S. Attorney’s Office who brought the case, appears to be highly unusual," the order said.The Court's decision to drop charges comes after multiple affidavits were filed by Adani and DOJ over two months.Since Adani was not charged with either conspiracy under Foreign Corrupt Practices Act (FCPA) or obstruction of justice, no criminal charge under this indictment remains pending against him.The Court, however, reserved its decision on DOJ’s request to dismiss the FCPA conspiracy charge against Ranjit Gupta, Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra and Rupesh Agarwal, as well as the obstruction charge against all of them except Gupta. These counts remain open for now because the Department has not adequately supported its reasons for seeking their dismissal..The US indictment had initially alleged that Gautam Adani, Sagar Adani, Vneet Jaain, Ranjit Gupta and others devised a scheme to bribe Indian government officials to secure agreements linked to a 12-gigawatt solar power project.According to prosecutors, bribes worth ₹2,029 crore, or about $265 million, were promised to officials of State electricity distribution companies. Of this amount, ₹1,750 crore was allegedly earmarked for officials in Andhra Pradesh to secure the purchase of seven gigawatts of solar power.The US DOJ later sought dismissal of the indictment against all eight accused. However, on June 25, Judge Nicholas Garaufis declined to immediately approve the request and directed the DOJ to explain its reasons.The DOJ later furnished reasons for its u-turn.The Court accepted one of the Department’s reasons for dropping the fraud charges. It found that the alleged assurances concerning Adani Green Energy’s anti-bribery policies, corporate governance and commitment to legal compliance were arguably too general to support a fraud prosecution.“The alleged misrepresentations appear to be so broad as to qualify as inactionable puffery,” the Court said..The Court observed that statements about a “zero tolerance” policy towards bribery and corruption and the company’s commitment to ethical standards could be treated as general corporate assurances rather than specific representations on which a reasonable investor would rely.However, the Court rejected several other reasons offered by Principal Associate Deputy Attorney General R Trent McCotter. These included arguments that the case was predominantly foreign, that Indian authorities had found no actionable misconduct, that investors had suffered no financial loss and that the accused were unlikely to appear before the US court..The Court examined separately the three Indian decisions relied on by McCotter to claim that Indian authorities had investigated the allegations and found no actionable misconduct. It concluded that the documents did not support this assertion and, in some respects, contradicted it.“Not one of the documents appears to be the result of an investigation by India or anyone else. Rather, each document appears to be a decision by an Indian government authority not to investigate. Not one of the documents meaningfully contends with the allegations in this case. In fact, the allegations-in each case, brought by a private individual-bear very little resemblance (if any) to the alleged conduct in the Indictment. Finally, no document concludes that nothing "inappropriate" happened.” the order said..The Court examined the following three judicial decisions rendered by courts/ competition watchdog in India:1) The Competition Commission of India decision arose from a private complaint alleging collusion and abuse of dominance by 12 entities in the generation and distribution of solar power;2) The Delhi High Court decision concerned a public interest litigation alleging irregularities in the competitive bidding process for solar-power projects;3) The Bombay High Court decision arose from another private petition seeking an investigation into alleged bribery.According to Judge Garaufis, none of the three decisions dealt with the alleged false representations made to lenders and investors in the United States. These decisions did not examine the allegations that certain accused destroyed evidence or gave false information to the Federal Bureau of Investigation, the Securities and Exchange Commission and Justice Department officials in New York, the US court said..The order also recorded that Gautam Adani’s lawyers had suggested during settlement discussions that the Adani Group’s publicly announced plan to invest $10 billion in the United States could form part of a resolution. The proposal was rejected by the US Attorney’s Office, and the Court ultimately accepted that the proposed investment did not influence the decision to seek dismissal.Thus, it eventually proceeded to accept the DOJ proposal and dismiss the charges against Adani..However, the DOJ was directed to provide adequate reasons and supporting material for dismissing the FCPA and obstruction charges against Ranjit Gupta, Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra and Rupesh Agarwal by August 31. Their lawyers must also confirm their consent to the proposed dismissal by the same date..Gautam Adani, Sagar Adani and Vneet Jaain were represented in the proceedings by Sullivan & Cromwell LLP co-chair Robert J Giuffra Jr and partner James McDonald. Incidentally, Robert Giuffra happens to be US President Donald Trump’s personal lawyer..The other lawyers who represented Adani are Timothy Sini (Nixon Peabody) and Andrey Spektor (Norton Rose Fulbright).Ranjit Gupta was represented by Paul Schoeman of HSF Kramer (New York).Cyril Cabanes was represented by Stephen Best from Brown Rudnick (Washington, DC).Saurabh Agarwal was represented by Winston Paes of Debevoise & Plimpton (New York).Deepak Malhotra was represented by Aditya Singh (Singapore) and Michael Kendall (Boston) of White & Case.Rupesh Agarwal was represented by Iris Bennett and Patrick Linehan of Steptoe (Washington, DC).
