Adani firm not the first Indian company under SEC scrutiny

New Delhi: Adani Green Energy Limited is not the first Indian company to be charged by the United States Securities and Exchange Commission (SEC) for bribery. Several other companies with bases or operations in India have faced scrutiny from the agency, which was established in 1934 to enforce laws against market manipulation in America.

A few weeks before it moved against the Adani Group company, the SEC announced on October 11 that Moog Inc — a New York-based global manufacturer of motion control systems for aerospace, defence, industrial and medical markets — agreed to pay a civil penalty of $1.1 million to resolve charges that it violated the Foreign Corrupt Practices Act (FCPA) due to bribes paid by its wholly owned Indian subsidiary, Moog Motion Controls Pvt Ltd.

The SEC said that, from 2020 to 2022, Moog Motion Controls employees bribed officials at Hindustan Aeronautics Limited and South Central Railways to win business. They used various schemes, including funnelling payments through third-party agents and distributors. They also offered cash bribes to Indian officials to favour Moog's products in public tenders and exclude competitors.

The SEC found that Moog violated the recordkeeping and internal accounting controls provisions of the US Foreign Corrupt Practices Act. Without admitting or denying the findings, Moog agreed to cease and desist from future violations, pay nearly $6,00,000 in disgorgement and prejudgment interest, and a $1.1 million civil penalty.

In September 2021, the SEC announced that London-based WPP plc, the world's largest advertising group, agreed to pay over $19 million to resolve charges of violating the US FCPA's anti-bribery, books and records and internal accounting controls provisions. The SEC alleged that WPP's Indian subsidiary continued to bribe officials for advertising contracts despite seven anonymous complaints. The commission also noted deficiencies in WPP's subsidiaries in China, Brazil and Peru. Without admitting or denying the findings, WPP agreed to cease violations and pay $10.1 million in disgorgement, $1.1 million in prejudgment interest and an $8 million penalty.

In August 2012, the SEC charged Oracle Corporation with violating the US FCPA for failing to prevent a subsidiary from secretly setting aside money off the company's books, which was used to make unauthorised payments to phony vendors in India.

In 2001, the SEC accused the State Bank of India (SBI) of offering and selling unregistered securities in the US. The SEC alleged that between August 5 and 24, 1998, SBI sold $532 million of Resurgent India Bonds to Non-Resident Indians and entities owned by NRIs, with Citibank selling approximately $160 million of these bonds. The SBI had not filed a registration statement, and no exemption was applicable. The SEC accused the SBI and Citibank of violating Section 5 of the Securities Act.