Amidst a reeling stock market, shares of Adani group flagship, Adani Enterprises ended 1.3 per cent higher, with positive sentiment creeping in as US President Donald Trump signed an executive order to pause enforcing the Foreign Corrupt Practices Act under which US authorities have launched bribery investigations against the conglomerate.
The 1977 FCPA prohibits American companies and foreign firms from bribing officials of foreign governments to get business or negotiating favourable terms for themselves.
Last year the US Department of Justice served an indictment notice on top Adani executives alleging that they bribed Indian officials to get solar contracts and concealing this even as the group issued bonds to US investors to raise funds.
The order that Trump signed asked “the Attorney General to review guidelines and policies governing investigations and enforcement actions under the FCPA” in 180 days.
Adani effect
“This decision directly impacts ongoing investigations, including the Adani Group bribery case, and raises broader questions about corporate compliance and cross-border law enforcement,” said Akshat Khetan, Founder AU Corporate Advisory and Legal Services, adding that it marked a significant shift in US regulatory policy.
“While the six-month review offers temporary relief, its long-term implications remain uncertain,’ he said.
A similar view was echoed by Nilesh Tribhuvann, Managing Partner, White & Brief, who said that while it could provide temporary relief by halting new investigations and enforcements it would not absolve the group of the allegations made against them.
Broader implication
The law has been used by the US authorities to levy billions of dollars in penalties from big corporations on charges of bribery.
“The recent pause in the enforcement of the FCPA is set to create some uncertainty. Regulatory oversight easing could lead to challenging environment particularly for businesses operating in high-risk jurisdictions,” said a senior lawyer with a law firm, who did not wish to be quoted.
“While this shift raises concerns about potential leniency in compliance, businesses should continue to withhold their compliance, ethical and corporate governance standards,” the lawyer said.