Rama Krishna Sangem
A day before PM Modi landed in the US, President Donald Trump gave a big relief to Indian billionaire Gautam Adani by stopping legal proceedings against the latter.
The suspension of the nearly 50-year-old Foreign Corrupt Practices Act (FCPA) by American President Donald Trump’s administration could delay or halt legal proceedings against the Adani group in the United States, experts have said, adding that the duration of the pause and outcome of the Department of Justice’s (DOJ’s) review of FCPA enforcement guidelines has to be watched closely.
“It is important to note that the executive order directs a review of current and past actions related to the FCPA, and the future of these cases will depend on the new guidelines established by the attorney general,” said Rishabh Gandhi, founder of law firm Rishabh Gandhi and Advocates, said a story in Business Standard.
Trump on Monday signed an executive order directing the DOJ to halt all persecutions of Americans accused of bribing foreign officials while trying to win or retain business in their respective nations. The FCPA, enacted in 1977, prohibits US companies and foreign firms listed on US stock exchanges from bribing foreign officials to obtain or retain business.
Troubles began in Nov 2024
In November last year, the DOJ accused Gautam Adani, founder of the Adani group, along with his nephew Sagar Adani and other company executives, of offences including conspiracy to violate the FCPA, securities fraud, and wire fraud. The indictment alleged the Adani group orchestrated a bribery scheme involving over $250 million in payment to government officials in India to secure lucrative solar energy contracts.
Trump’s February 10 Monday order halts implementing the FCPA and orders Attorney General Pam Bondi to review current and past decisions related to the law and make guidelines for enforcement. “It’s going to mean a lot more business for America,” Trump said while signing the order.
Trump never liked this law
In the past, Trump had termed it a “horrible law” and said the world was laughing at the United States for implementing it, according to a Reuters report.
Alay Razvi, managing partner, Accord Juris, said the DOJ might de-prioritise or dismiss the ongoing foreign bribery cases after Trump’s order. This could in turn lead to weakening enforcement and therefore embolden companies to engage in dubious transactions without fear of US prosecution, potentially increasing corruption risks, he said, adding that countries that relied on the US for financial oversight might now tighten their domestic anti-corruption laws, shifting the burden to local regulators.
“International trade relations could shift, with businesses in countries like India facing less scrutiny from US authorities on foreign deals,” he said. With the enforcement of the FCPA now halted, immediate legal pressures on the Adani group may alleviate at least in the short term but this does not equate to exoneration, said Kunal Sharma, partner, Singhania & Co.
What Next?
The executive order directs a review of current and past actions related to the Foreign Corrupt Practices Act (FCPA). The future of these cases will depend on the new guidelines established by the attorney.-
Indian businesses will likely face less scrutiny from US authorities on foreign deals. – Department of Justice may deprioritise or dismiss ongoing foreign bribery cases. This could embolden companies to engage in dubious transactions without fear of US prosecution.
After this, Trump is expected to undo many other things the previous Biden administration has done against PM Modi’s inner circle and the interests of the ruling BJP.
