(Bloomberg) -- US prosecutors face steep legal and diplomatic hurdles in their bid to imprison billionaire Gautam Adani for allegedly helping plot bribes of more than $250 million to officials in India and defraud US investors.
To get Adani — India’s most powerful businessman and a close ally of Prime Minister Narendra Modi — to appear in a courtroom in Brooklyn, New York, the US would likely have to pursue a legal process known as extradition. That process could take months if not years, and its outcome is by no means certain.
With a five-count indictment unsealed on Nov. 20, prosecutors set in motion a chain of events that could test the strength of the US relationship with India and the basis for charging Adani and seven others.
Prosecutors allege Adani was part of a scheme to “corruptly offer, authorize, promise to pay and to pay bribes” of hundreds of millions of dollars to government officials in India. The alleged aim was to induce them to enter contracts that one of his companies, Adani Green Energy Ltd., needed for India’s largest solar power plant project. They also allege that Adani and others concealed the bribe scheme from banks and US investors as they tried to raise money.
Adani faces up to 20 years in prison on each of the three counts against him but would probably receive far less time if convicted and sentenced.
The Adani Group denied any wrongdoing and said it would seek all possible legal recourse to defend itself.
Five of the defendants face a charge of conspiring to violate the US Foreign Corrupt Practices Act — but not Adani. He and two others are charged with securities fraud, conspiracy to commit securities fraud, and conspiracy to commit wire fraud. The prosecutors allege that Adani met with a government official in India to advance the bribe scheme.
What is extradition?
International extradition is a legal process in which one country asks another to surrender a person for prosecution or to serve a sentence after conviction. The US must have a treaty in place with a country to seek extradition. The US and India signed a treaty in 1997 that outlines this process. The way it works in India is governed by the Extradition Act of 1962.
How does extradition work?
The US State Department will deliver the indictment and other relevant documents to the Indian Ministry of External Affairs. The Indian government will then decide whether to order a magistrate to start an inquiry.
The magistrate won’t determine the guilt or innocence of an alleged offender; rather, they will seek to assess whether the US Justice Department has enough evidence to proceed to trial. The magistrate must also look at whether there are comparable crimes under Indian law. The US Foreign Corrupt Practices Act is at the heart of the indictment.
What is the Foreign Corrupt Practices Act?
The FCPA was passed in 1977 and is enforced by the Justice Department and the Securities and Exchange Commission, which have recovered billions of dollars from bribery schemes around the world. The FCPA bans payment of money or anything of value to foreign officials to obtain or retain business or gain an improper advantage. Prosecutors say it applies in this case because Adani Green raised money in the US to support its solar-energy project.
How can Adani resist extradition?
Lawyers for Adani and the others could argue that the indictment appears to be of a “political character” and so is not subject to the Extradition Act. They may also argue that the alleged offenses are not covered under Indian law.
Will politics play a role in the decision?
While a magistrate will make a decision, the final call is up to the Indian government. That may hinge on diplomatic relations between the US and India. Bilateral ties have already been strained by a separate Justice Department case alleging an Indian government employee tried to arrange the assassination of a US citizen in New York.
US President-elect Donald Trump could decide to cut a deal with India to dismiss the case. Key figures in Trump’s orbit see India, and the Adani Group, as important partners to push against Chinese hegemony.
What if Adani goes to another country?
It’s possible that Adani could leave India, at which point he could be arrested under an Interpol red notice that can follow such charges. A red notice is a request to law enforcement agencies worldwide to locate and provisionally arrest a person. If a country were to arrest him on a red notice, an extradition proceeding could begin in that country, if it has a treaty with the US.
How long could all of this take?
The Justice Department says on its website that extradition can take months or years. In the case of Ukranian businessman Dmitry Firtash, the process has gone on for longer than a decade. He was arrested in Vienna and is fighting US allegations that he led a conspiracy to pay $18.5 million to Indian officials to facilitate a $500 million titanium project there. On the 10th anniversary of his arrest, his lawyers urged the US government to drop the case.
--With assistance from Iain Marlow and Patricia Hurtado.
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