If Adani is accused of bribes in India, why is he being charged in US? What SEC parallel probe says

Gautam Adani, his nephew Sagar Adani, and several executives of Indian firms Adani Green Energy and Azure Power have been charged in the US over an alleged bribery scheme.

They allegedly bribed, or promised bribes to, officials in India for lucrative renewable energy contracts.

But if the indictment charges are related to their alleged actions within India, why are they charged in the US? Or more specifically, can they be indicted in the US?

In the interconnected world of global business, an action a company take in its home base country can expose it to US scrutiny and punitive actions as long as American markets, investors and other stakeholdersare impacted or involved. Action can apply if the company or its subsidiaries trade in US stock exchanges, has US operations even if board members and executivesare based in foreign countries, or raise funds through venture capital, bonds or loans.

Broadly speaking, anything that violates US securities laws, and its Foreign Corrupt Practices Act (FCPA) is fair game even if the companies and people involved are not US residents or citizens.

WATCH: Indian Billionaire Gautam Adani Charged By US Over Alleged $250 Million Bribe Plot

In Adani's case, there are several causes that make the US law extend its arms to something that appears prima facie not within its jurisdiction.

One is the alleged obstruction of justice in the US. Two, the alleged lying to US officials. Three, the accused having served in some capacity in companies trading in the US stock markets. And four, the company raised capital - through investments or bond issues- in the American markets on schemes that are allegedly tainted by corruption.

All these have been alleged, though not proven.

A broad picture emerges in the nature of charges from the parallel probe opened by the Securities and Exchange Commission, the US market regulator.

In order to understand that probe, it's important you know about Azure Power. The solar power company, founded in New Delhi, had raised investment capital in the US in the past years and trades on the New York Stock Exchange.

The SEC said in a release that Adani Green’s note offering had raised $175 million from US investors even as the alleged bribery scheme was ongoing.

A note offering is a sale of a variety of debt securities, wherein companies raise investments through loans or corporate bonds.

What the SEC chargesheet says about Adani Green and Azure power officials

SEC, in a release, said it charged Gautam Adani and Sagar Adani as well as Cyril Cabanes, an executive of Azure Power Global Ltd., for conduct arising out of the bribery scheme.

It claimed the scheme was orchestrated to enable the two renewable energy companies 'to capitalise on a multi-billion-dollar solar energy project awarded to the companies by the Indian government.'

Even as the bribes were being paid, Adani Green raised more than $175 million from US investors.Azure Power’s stock was trading on the New York Stock Exchange too.This is how it becomes an issue that the US can prosecute.

The SEC said it has taken two actions against Adani and Azure.

In one, it charged Gautam Adani, who serves as chairman of Adani Green’s Board of Directors, and his nephew, Sagar Adani, who is the executive director of Adani Green’s board, "for orchestrating the bribery scheme."

That scheme was for paying or promising hundreds of millions of dollars in bribes to the Indian officials "to secure their commitment to purchase energy at above-market rates that would benefit Adani Green and Azure Power".

The SEC alleged that Gautam and Sagar "induced" US investors to buy Adani Green bonds while misrepresenting its compliance on corruption and bribery.

In the documentation related to the note offering, Adani Green made statements about its anti-bribery and anti-corruption efforts. This, the SEC alleged, were "materially false or misleading in light of Gautam and Sagar Adani’s conduct."

The second action involves Cyril Cabanes, a former member of Azure Power’s Board of Directors.

Cabanes has been charged with violating FCPA for his role in the alleged bribery scheme.

SEC charges are seeking a permanent injunction on Cabanes, a civil penalty, and an officer and director bar.

Cabanes allegedly facilitated the authorisation of bribes in furtherance of the scheme while in the United States and abroad.

"Cyril Cabanes participated in the underlying bribery scheme while serving as director of a US public company,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement, as quoted by SEC.

“We will continue to vigorously pursue and hold individuals, including senior corporate officers and directors, accountable when they violate our securities laws,” Wadwa added.

The SEC is seeking civil penalties and permanent injunctions on the accused, as well as barring them from holding official and director positions in companies with business in America.

The SEC action is separate from, yet related to, the broader criminal charges filed by the US Justice Department against Gautam Adani, Sagar Adani, Cyril Cabanes and some other executives linked to the Adani group and Azure power.

For its part, the Adani group called the allegations made in the US "baseless and denied." It noted that the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty, while adding"all possible legal recourse will be sought."