US court accepts Adani's plea seeking dismissal of SEC fraud case

A US court has accepted a plea filed by the counsels for Gautam and Sagar Adani seeking dismissal of a securities fraud case filed by the US Securities and Exchange Commission(SEC).

 

In an order issued on April 7, Judge Nicholas G Garaufis of the Eastern District Court of New York granted the defendants’ request for a pre-motion conference. The court directed both parties to confer and coordinate with the deputy clerk to schedule the hearing ahead of a planned motion to dismiss by April 30.

 

The US SEC sued Gautam Adani and his nephew Sagar Adani in November 2024, alleging they misled investors by failing to disclose an alleged bribery scheme involving Indian state officials, under US securities laws. Denying the charges, the two, through their lawyers, filed a pre-motion letter ahead of a proposed April 30 motion to dismiss in the Eastern District Court of New York.

 

 

What did the Adanis say in their plea?

 

In their plea, the Adanis argued that the US SEC’s claims related to a 2021 bond sale by Adani Green Energy Ltd (AGEL) are legally flawed on multiple grounds. They contended that US courts lack personal jurisdiction, stating that neither Gautam Adani nor Sagar Adani had sufficient contact with the US or any direct role in the bond issuance, reported PTI.

 

They emphasised that the $750-million bond sale was conducted outside the US under Rule 144A and Regulation S exemptions. The securities were sold to non-US underwriters and only later resold in part to qualified institutional buyers, with Adani Green not involved in those downstream transactions.

 

The filing also asserts that the SEC failed to establish a “domestic transaction”, a key requirement under US securities law and did not show where irrevocable liability was incurred or where title transfer occurred within the US.

 

It further argues that the case represents an impermissible extraterritorial application of US law, as it involves Indian defendants, an Indian issuer, securities not listed in the US, and alleged conduct that took place entirely in India.

 

The Adanis also highlighted that the SEC did not allege any investor losses. The bonds in question matured in 2024, with Adani Green repaying the full principal and interest.

 

The plea also stated that the regulator failed to link either defendant to specific misleading statements or establish intent to defraud.

 

What were the SEC allegations?

 

The SEC had filed its lawsuit in November 2024 against Adani and his nephew, Sagar Adani, alleging they misled investors by failing to disclose an alleged bribery scheme involving state government officials. The regulator framed the case under US securities laws, linking it to a $750-million bond offering by Adani Green Energy Ltd in 2021.

 

Separately, US federal prosecutors in Brooklyn alleged that the Adanis were involved in a $250-million bribery scheme aimed at securing solar power contracts in India. According to the SEC, Gautam Adani led efforts to pay or promise large bribes while publicly maintaining that the company adhered to anti-corruption laws.

 

The Adani Group has denied all allegations, calling them 'baseless'.