US President Donald Trump has ordered a pause in the enforcement of a nearly half-century-old law that was used to go after the Adani Group under the previous Biden administration.
The Foreign Corrupt Practices Act (FCPA) bans firms and people with US ties from offering money or gifts to foreign officials to secure business overseas.
President Trump had considered pausing the law during his first term.
“It sounds good on paper, but in [practice] it’s a disaster,” President Trump said on the FCPA, the British daily Financial Times reported. “It means that if an American goes over to a foreign country and starts doing business over there legally, legitimately or otherwise, it’s almost a guaranteed investigation, indictment and nobody wants to do business with the Americans because of it.”
The order marks one of the boldest enforcement policies issued by the Trump administration, FT reported.
The Adani Group – the largest and fastest-growing portfolio of diversified businesses in India – last year strongly denied allegations by the Biden administration that some company officials were part of an alleged scheme to pay over $250 million bribe to Indian officials in exchange for favourable terms for solar power contracts.
“… Over-expansive and unpredictable FCPA enforcement against American citizens and businesses – by our own Government – for routine business practices in other nations not only wastes limited prosecutorial resources that could be dedicated to preserving American freedoms, but actively harms American economic competitiveness and, therefore, national security,” the White House said in a statement on pausing the FCPA.
“It is therefore the policy of my Administration to preserve the Presidential authority to conduct foreign affairs and advance American economic and national security by eliminating excessive barriers to American commerce abroad,” President Trump’s executive order said.
The executive order that President Trump signed asked the US Attorney General to “review in detail all existing FCPA investigations or enforcement actions and take appropriate action with respect to such matters to restore proper bounds on FCPA enforcement and preserve Presidential foreign policy prerogatives”.
Following the executive order to pause the enforcement of the FCPA, stocks of all Adani Group firms saw substantial gains today. The most notable gainer was Adani Enterprises Ltd, whose stock rose 4.28 per cent. Following closely was Adani Power Ltd, which rose 4.17 per cent to Rs 511.90 apiece.
Adani Green Energy Ltd was the third top gainer, as it rose 3.34 per cent to Rs 985.90 apiece. New Delhi Television Ltd (NDTV) stock rose 3.84 per cent to Rs 145 apiece. The shares of Adani Energy Solutions Ltd, Adani Total Gas Ltd, and Adani Ports and Special Economic Zone Ltd also saw gains.
On Monday, six US Congressmen in a letter to Attorney General Pam Bondi said the previous Department of Justice’s (DoJ) action was a “misguided crusade” that came at the “risk of harming” America’s relationship with a “strategic geopolitical partner” like India.
They called it one of the “unwise decisions” by the Biden administration.
“This case rests on the allegation that preparations were made by members of this company in India to bribe Indian officials, also exclusively located in India. Instead of deferring the case to the appropriate Indian authorities, the Biden DoJ decided to push forward and indict the company’s executives without any real injury to US interests being present,” the six Congressmen said.
The Adani Group has interests in logistics (seaports, airports, logistics, shipping and rail), resources, power generation and distribution, renewable energy, gas and infrastructure, agro (commodities, edible oil, food products, cold storage and grain silos), real estate, public transport infrastructure, consumer finance and defence, and other sectors.
(Disclaimer: New Delhi Television is a subsidiary of AMG Media Networks Limited, an Adani Group Company.)