Indictment of the chairman and top executives of the Adani Group on bribery charges by a New York court, has set alarm bells ringing in India. Less than two years ago, a US short-seller, Hindenburg, had alleged massive financial impropriety by the Adani group, but after long drawn enquiries, SEBI gave the Adanis a clean chit ~ which was endorsed by the Supreme Court. In 2022, a Sri Lankan official had alleged that the Government of India had pressurised the Sri Lankan Government to award a contract for a renewable energy project to an Adani firm, but all was forgotten when the government in Sri Lanka changed.

However, after the US indictment, Sri Lanka and Bangladesh are reviewing their contracts with the Adani group, while Kenya has cancelled two mega deals valued at US$2.5 billion with the Adanis. It is natural that Indian businessmen would carry their corporate culture abroad; some part of which is praiseworthy ~ their hard work and dedication, for example ~ but tolerance of, and indulgence in, corruption which is prevalent in India, is quite another matter. The West swears by the rule of law, which means that criminality if exposed is punished heavily ~ regardless of the persons involved. Moreover, the entire Western world has a fully formalised economy and a sophisticated reporting system which identifies unusual transactions in real time. Most Western countries, including the US, have unobtrusive surveillance systems in place that keep tabs on foreigners, and more so on rich and important ones.

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Then, Western agencies are proactive and not merely reactive, as is the wont of Indian agencies. An example is the entrapment, by decoys, of two Indian citizens, who were seeking to recruit a killer to eliminate the Khalistani Pannun. Most importantly, VIPs from third world countries do not have the privileges and immunities they enjoy in their own countries; strict action follows if found non-compliant to local laws, as the case of Devyani Khobragade, the Indian diplomat, would show. A complicating factor is India’s rise in the international pecking order, which is resented by the old elite namely West European nations and the US. Despite protestations of friendship and under the guise of advancing a rule-based order, the US does not miss any opportunity to put us down. The April 2021 incident, when USS John Paul Jones of the Seventh Fleet deliberately navigated through Indian Exclusive Economic Zone, without permission from Indian authorities, statedly to uphold Freedom of Navigation Operation (FONOP), is a case in the point.

Later on, to rub in the insult, the US Seventh Fleet Commander issued the following statement. “This Freedom of Navigation Operation (FONOP) upheld the rights, freedoms, and lawful uses of the sea recognized in international law by challenging India’s excessive maritime claims…We conduct routine and regular Freedom of Navigation Operations, as we have done in the past and will continue to in the future. FONOPs are not about one country, nor are they about making political statements.” Another example is that of Albert Noriega, the President of Panama, who was captured and flown to the US, where he was tried on a Miami Court indictment, convicted, and sentenced to 40 years in jail, ultimately serving 17 years in a US prison. Contrast this with the murder of Jamal Khashoggi, a US national, by agents of the Saudi Arabian government allegedly at the behest of the Saudi ruler, Mohammed Bin Salman (MBS), in the Saudi consulate in Istanbul. The lure of Saudi oil and dollars ensured that the US never let the murder of Khashoggi mar its relations with Saudi Arabia or Mohammed Bin Salman.

The Tata group was the first to take its business to the US. Known for their probity and adherence to rules, they rose slowly and steadily, facing no problems with US regulators, unlike newer and more ambitious entrants like BYJU and Adani. The genesis of the problem is in India; white collar crime goes unpunished, and even undetected, due to lax enforcement. Brought up in such an environment, Indian businessmen are unable to comprehend the consequences of transgression of local laws in a foreign country. Another reason for the laissez faire attitude is the unhealthy relationship between politics and business in India. Just before the elections, on 11 February 2024, the Supreme Court directed the State Bank of India (SBI) to supply details of donations received through Electoral Bonds (EBs) to the Election Commission by 12 March 2024. After much hemming and hawing, SBI provided lists of donors and donees, but without the crucial unique identifier which could connect donees and donors. After another dressing down, missing details were furnished, and donors and donors were linked ~ the entire process, which the SBI averred would take months, was completed in a few days.

This se quence of events is a sorry reflection on the morality and truthfulness of India’s leading banker. Once details of donations through Electoral Bonds were published, more damaging conclusions were postulated; it appeared that some companies had donated money after the visit of enforcement agencies. Others had donated money, before or after award of lucrative government contracts. Surprisingly, some companies had donated money many times in excess of their net worth, pointing to those companies being fronts for others, indicating violation of both taxation and electoral laws. Instead of initiating penal action against the erring corporates and political parties, several ministers, without any enquiry, denied any wrong-doing. The PM defended the Electoral Bond scheme, saying that the country had been pushed towards black money in elections after the Supreme Court scrapped the scheme, and that on honest reflection, “everyone will regret it.” Sadly, even the Opposition did not pursue the matter to its logical end, because ruling parties in all States had benefited from the Electoral Bonds Scheme ~ showing that all political parties are tarred by the same brush.

The aftermath of most elections in the recent past has witnessed numerous floor crossings leading to formation of governments against the public mandate. It is no one’s case that the legislators’ change of heart was motivated purely by ideology, hence moneyed backers rule the roost in most political parties. This is a reality in all democracies, including the US, where the nomination of Elon Musk, to a super-powerful policy panel, Department of Government Efficiency (DOGE), has sparked a heated controversy. However, generally speaking, the relationship between businessmen and politicians is much more transparent, and open to public scrutiny, in the West.

The US fancies itself as the global policeman taking unwarranted notice of events and practices in foreign countries ~ particularly lesser developed ones. Many US laws confer extra-territorial jurisdiction to US courts, one of which is the US Foreign Corrupt Practices Act (FCPA), under which the Adani group’s executives are being charged. Therefore, the argument that US courts have no jurisdiction because malfeasance, if any, was committed in India, by an Indian business entity, is of no consequence in eyes of the US. The probable trial in the US of an Indian icon, and one of the world’s richest men ~ a selfmade one, to boot ~ will make for a sorry spectacle. Since India plans to become an economic superpower in the next few years, more and more Indians will have business interests abroad in the coming years. So, if things do not change, there could be more incidents of the Adani kind. To avoid cutting a sorry figure, it is necessary for Indian businesses to adopt more ethical practices, and for the Government to tighten enforcement of anti-corruption laws.

A related issue is that of transparent election funding, which cannot be resolved, except by unanimous agreement of all political parties. Unfortunately, corruption is a disease that has no permanent cure, we can only aim to control it. As Alan Greenspan, the famous economist and Chairman of the US Federal Reserve for nineteen years, had remarked: “Corruption, embezzlement, fraud, these are all characteristics which exist everywhere. It is regrettably the way human nature functions, whether we like it or not. What successful economies do is keep it to a minimum. No one has ever eliminated any of that stuff.”

(The writer is a retired Principal Chief Commissioner of Income-Tax)