Is the Adani indictment a case of US legal overreach?

The recent US indictment of Indian billionaire Gautam Adani has ignited debate over the US deploying “extraterritorial jurisdiction” to target rising companies from the Global South.

Analysts are drawing parallels with the legal and political hurdles faced by Chinese telecom giant Huawei, particularly the 2018 detention of its CFO, Meng Wanzhou, in Canada at the behest of the US. Both instances highlight the challenges corporations from emerging economies face when they try to sell their products or raise funds in the Western markets.

“The rise of firms from developing economies and the Global South has undeniably unsettled the West, with China and India facing intense scrutiny,” Mike Liu, Vice President of the Beijing-based Center for China and Globalization, tells TRT World from Beijing.

“Western companies often deploy every available tactic to prevent competitors from entering their home markets. This strategy, inherent to global competition, frequently relies on legal actions and geopolitical manoeuvres as key tools in their arsenal.”

Gautam Adani, once celebrated as a symbol of India’s growing economic might and a close ally of Prime Minister Narendra Modi, and his close associates have been charged with orchestrating a complex bribery scheme to secure solar energy contracts in India.

The US Attorney’s Office of the Eastern District of New York has accused Adani and senior executives of his Adani Green Energy Limited in a 108-page indictment of promising over $265 million in bribes to Indian officials to secure energy contracts.

The indictment says Adani’s company raised money from international investors, including some from the US, and defrauded them by lying about its anti-bribery measures.

But Kanwal Sibal, India’s former foreign secretary, questioned how the US can extend its legal jurisdiction to another country.

“This is sheer high-handedness. An abusive use of US power,” Sibal asserts in a series of tweets, adding that if the US has information on acts of bribery, it should work through India’s legal system.

“The indictment is against an Indian national for acts committed on Indian soil. The extraterritorial jurisdiction claimed by the US violates the sovereignty of other countries.”

Sibal highlights that if US investors are affected, they should seek redress from the Indian justice system, as “Indians have been allegedly bribed, not Americans.”

The Adani Group has dismissed the allegations, labelling the indictment as “baseless.”

The indictment against Adani follows last year’s report from the short seller HInderburg Research, which accused the Indian conglomerate of artificially shoring up its stock price. Adani denied the allegation, which had wiped out tens of billions of dollars from its market value.

Can US law extend to other countries?

While India’s Securities and Exchange Board (SEBI) has initiated an inquiry into the Adani Group following the US indictment, many in India perceive the case as a stark example of legal overreach.

“How is it America’s business whether Adani, or any Adani Group company, tried to bribe Indian government officials?” questions a New Delhi-based legal analyst in agreement with Sibal, speaking to TRT World on the condition of anonymity.

“The Americans seem to have framed the case on a legal technicality. The company, Adani Green Energy, is US-listed and raises money from US financial institutions, and therefore is answerable to the US Securities and Exchange Commission. This may be technically correct,” the analyst notes.

“But practically, it’s difficult to justify this as America’s business,” he asserts.

This sentiment reflects broader frustrations within India’s ruling establishment and business circles, where the indictment is seen not just as a legal issue but as part of a strategy by the US to curb the influence of emerging market giants.

Sibal, the former foreign secretary, has expressed concern over the growing influence of the US in international legal matters, warning that the US will use its judicial system to exert control over countries that challenge its global dominance.

“Such buccaneering will cost India-US relations.”

Paying the price for eating the lion’s share?

The US indictment against Adani Group comes at a time when the Indian conglomerate is aggressively expanding globally. In recent years, Adani has diversified into renewable energy, infrastructure, and ports, with major investments in Australia, Africa, and the Middle East.

This has solidified its position as a key player in global infrastructure development, particularly clean energy. While Adani’s acquisition of Australian coal mines and plans for large-scale solar and wind projects have drawn praise and criticism, they underscore the company’s growing influence on the world stage.

In the renewable energy sector, Adani Group has been competing internationally, including in the US market, where its solar energy business has grown rapidly. Adani Solar secured its largest single-year order (1.6 GW) from a key utility company in the US, highlighting its increasing competitiveness against established American players.

Parallels with the Huawei case

The US indictment coincides with increased scrutiny of corporations from the Global South. Adani’s legal troubles appear similar to those faced by Huawei, especially the detention of Huawei’s CFO, Meng.

Meng, the daughter of Huawei’s founder Ren Zhengfei, was accused of violating US sanctions on Iran by misleading banks like HSBC about Huawei’s dealings with a company allegedly breaching US export laws.

In both cases, the legal actions against corporate leaders appear intricately linked to their companies’ expanding global influence. Just as Adani’s rapid expansion across multiple continents and industries challenges Western interests, Huawei’s growth in 170 countries was seen as a direct threat to Western tech giants like Apple and Ericsson.

In response, China accused the US of exercising “long-arm jurisdiction” in the case. Meng was released after three years of detention in September 2021.

As the Adani Group confronts similar legal challenges, Chinese analysts express empathy for the Indian conglomerate, given that the indictment also names Adani’s nephew, Sagar Adani, who faces arrest following summons by the US Securities and Exchange Commission over bribery allegations.

Liu believes the rise of multinational corporations from the Global South is difficult for the US and the West to accept.

“These companies are reshaping global markets and challenging traditional Western dominance. The scrutiny they face is often disproportionate, driven as much by geopolitical concerns as by legal principles.”

source : trtworld