Congress MP Manish Tewari stressed the importance of a Joint Parliamentary Committee (JPC) to thoroughly examine the wider implications of the US indictment against the Adani group. He pointed out that the case raises serious concerns not only about the Adani group but also about India’s regulatory framework and the credibility of the market.

In an interview with CNBC-TV18, Tewari also called for a closer look into the role of Indian regulators, particularly SEBI, questioning whether they were aware of the ongoing US investigation and why they were not taking proactive steps to ensure transparency.

He stressed that the allegations, involving bribery of Indian officials, have serious implications for India’s reputation as a transparent and ethical business destination, and the Government of India must address them seriously.

A US court has charged Gautam Adani, his nephew Sagar Adani and several other officials with bribing Indian government officials to secure solar power contracts.

The indictment alleges that Adani paid over Rs 2,000 crore in bribes, including Rs 1,750 crore to a senior Andhra Pradesh government official, who has not been identified. US authorities claim that Gautam Adani personally met with this official to facilitate the deal. The Adani group is also accused of withholding information regarding an FBI investigation into Indian financial institutions and investors.

The indictment states that in March 2023, Sagar Adani’s electronic devices were seized and Gautam Adani was simultaneously notified of the probe.

In response, Adani has denied all allegations, calling them baseless and denying any wrongdoing. Adani went on to say that the defendants are presumed innocent until proven guilty.

Below are excerpts from the interview.

Q: How do you see the opposition addressing this in the upcoming session of Parliament? This is definitely going to be a big question, but how are you going to address it? Will you be asking for a response from the Treasury on this as well?

Tewari: I think it would be important to point out that these allegations are extremely disturbing, and these are not allegations now, this is an indictment. Therefore, the prosecutors in the United States, both the prosecutors of the Eastern District Court of New York and the Securities and Exchange Commission (SEC) seem to have found enough prima facie evidence to be able to present a charge in court. So therefore the matter is very serious. It has ramifications and repercussions not limited to a particular company or to the Adani group of companies, but has implications for the overall reputation of India as a business destination, India as a business hub.

In these circumstances, it is therefore important that the government takes these allegations very seriously, as the allegation is the alleged bribery of Indian officials. So therefore the Government of India should take this very seriously as it is not really about a particular entity or a business group, namely the Adani group of companies, but has an overall bearing on how India would be seen by the rest of the world, as a business destination where business practices are transparent, open and conducted with a certain degree of integrity.

Q: One question on our mind is what kind of fines the Adani group, the Azure Power group and others accused in this case might have to pay. What we’ve been given to understand that this can be a hefty fine, if you’re trying to find a settlement, and even then, you may not be completely after. The fine can be anywhere, it can be decided based on the bribe given in India, and also the capital you have raised from the US markets. Can you give us an idea of ​​what might be the actual costs penalty for the defendants involved and how that will be calculated going forward?

Tewari: I think there is an implicit assumption that there would be a basic negotiation. The negotiation really depends on whether the prosecutors are interested in settling or not. So therefore it would eventually go to a court, and a court will have to rule on the merits. So therefore it is a two step process.

Assuming, hypothetically, if someone were to go down the path of an indictment, first of all, where an indictment at all will be acceptable to the prosecutors, and number two, even if it is acceptable to the prosecutors, will be the judge or judges in question willing to assess that offer? So I think there are a lot of ifs and buts at this point, and so it’s a legal process, it’s a trial, and the trial will obviously play out in concurrent jurisdictions. If my information is correct, or if the indictments available in the public domain are correct, there appear to be two separate indictments, one by the United States Attorney for the Eastern District of New York and the other by the Securities Exchange Commission.

Q: In this case, FEPA (Foreign Extortion Prevention Act) also applied, which gives the US authorities the power to go against government officials. Currently, they have not named the Andhra Pradesh government official to whom a bribe was allegedly offered, but at some stage they may even call in the government officials involved. Do you feel that the Indian government and all the businessmen accused in this case must now start cooperating with the US authorities in this case? Will this case also be addressed diplomatically?

Tewari: I am frankly not aware of the FEPA that you referred to. So it is something that needs to be studied. But eventually it is now up to the people named in the indictment and their attorneys as to how they would really like to approach this issue, and how they would like to bring it up in the courts of the United States.

But suffice it to say that the concern has been deepening and deepening back to the Hindenburg revelations. If you remember, we had had a conversation about that, and at that time I had also said that a Joint Parliamentary Committee (JPC) had to be formed to not only go into the allegations that came out in the Hindenburg report, but more importantly, the credibility , the integrity, the processes followed by our market regulator, because it is ironic that while SEBI has to a very, very large extent given a clean slate even earlier when the Hindenburg report was being decided by courts, the Securities and Exchange Commission in The US has found enough prima facie evidence to proceed against this Indian entity, namely the Adani group of companies. So to that extent anyone who has been charged is right when they say you are innocent until proven guilty. But as I pointed out earlier that the Joint Parliamentary Committee is actually the need of the day, because it is not just a matter of a particular entity. It is about how this will impact the entire India business environment. Number two, more importantly, what about our own regulators? Were our regulators really unaware or did they deliberately choose not to exercise oversight. So therefore there are very, very troubling issues that arise and in those circumstances, because the only authority that exercises oversight over the regulators is Parliament or Parliament through the Standing Committee, the Parliamentary Standing Committee on Finance, it would be appropriate to review this whole issue by a joint parliamentary committee, because your concerns are not limited to just one geography. There are concerns that have also stemmed from other geographies.

Q: Can we assume that the Parliamentary Committee on Finance would now like to summon SEBI officials to understand whether they knew about these allegations and this investigation in the US?

Tewari: I can’t second-guess what the Parliamentary Standing Committee would or wouldn’t do, because eventually that’s something that the committee would have to collectively decide on. I believe that the appropriate person to address this matter would be the Chairman of Parliament’s Standing Committee on Finance. He would be in a better position to answer that. But suffice it to say that I believe that, given the implications, it would be appropriate for this matter to be dealt with by a joint parliamentary committee. I remember two years ago, I had written a commentary in a leading newspaper in which I had forcefully argued and articulated the need to set up such a committee, and therefore under the circumstances it should be the way forward.

Q: This investigation has been ongoing for the past two to three years. Azure Power, one of the defendants, has told us in a statement that they have been following this investigation, and the named directors have left the company. They said they do not deny or dispute the allegations, at least in the media reports. As for the Adani group, they have said that these are baseless allegations and they deny it completely. But having said that, given that this investigation was going on in the US, is it incumbent on these companies to inform the Indian authorities as well? The Hindenburg Report was also before the Supreme Court. Was the Adani group required to keep the Indian authorities, the Indian market regulator, informed about this investigation?

Tewari: More importantly, the regulator should have exercised its authority to find out what was really going on with its US counterpart and with the concurrent criminal investigation that was playing out. Based on the indictment, it appears that these reports were available in the public domain. So therefore the company obviously needed to keep the Indian regulator in the loop. But that’s part of it. The regulator, on its own, was actually supposed to do due diligence and ask the company what was really going on and transparently kept not only the investors but the nation in the loop regarding what was allegedly going on in the United States of America.