What next after arrest warrant against Gautam Adani?

Following the indictment of Gautam Adani, his nephew and six other defendants in the US, the case against them is going to come up for a final hearing and trial. There will be no trial if Gautam Adani pleads guilty at the arraignment stage, when charges are formally communicated to the defendants. If he and the others plead ‘not guilty’, the case will proceed to a trial by jury.

Chances of the defendants pleading ‘guilty’ are clearly remote. Even more unlikely is the possibility that the chairman of the Adani Group will decide against appearing before a court in New York.

Lisa H. Miller, deputy assistant attorney-general for the US Justice Department’s criminal division, accused Adani and his associates of bribing Indian government officials and conspiring to obtain lucrative solar energy supply contracts “through corruption and fraud at the expense of US investors”.

The charges filed against Gautam Adani and others under various laws carry strict punishments, claimed Saurav Das, an investigative journalist who writes on legal affairs. Securities fraud can result in up to 20 years in prison and up to $5 million in penalties.

Conspiracy to commit securities fraud can again result in up to five years in prison and fines of up to $250,000. The wire fraud conspiracy charge can result in up to 20 years prison time and heavy fines. The Foreign Corrupt Practices Act (FCPA) charges can again result in up to five years in prison and a fine.

Under the US system, the investigating agency hands over the evidence to a public prosecutor — a lawyer — who weighs the evidence and decides whether a crime or ‘felony’ has been committed. Once the prosecutor decides that a crime has been committed, he or she initiates the selection of a grand jury — a panel of people selected randomly and living within the jurisdiction of the court that may hear the case.

In the State of New York, the grand jury may include a minimum of 16 and a maximum of 23 jurors — 12 of whom must agree to indict the accused. The grand jury’s task is, however, just to decide if the evidence on record is enough to necessitate holding a trial. In New York State, a person cannot be brought to trial for a felony unless that person has been indicted by a grand jury.

According to the indictment issued against Gautam Adani and others, the $6 billion investment (Rs 50,676 crore approximately) in a solar power project was estimated to yield over $2 billion (Rs 16,892 crore) in post-tax profits over 20 years. However, the project encountered an unexpected setback — its high energy costs made it unaffordable for Indian discoms, leaving the government-owned Solar Energy Corporation of India (SECI) grappling to attract buyers to sign on.

The indictment accuses Adani and his associates of conspiring to bribe Indian officials to secure energy contracts in a purported violation of the FCPA. Though enacted in 1977, the law has been more stringently enforced in recent decades resulting in substantial fines for major companies, including Germany’s Siemens, Brazil’s state-owned Petrobras, and a subsidiary of oil services giant Halliburton.