Gautam Adani Seeks Dismissal of SEC Fraud Case in New York
Hearing Scheduled for SEC Case Dismissal
Photo: @InvGurInd/X
New York, April 8: A judge in the United States has approved a request from billionaire industrialist Gautam Adani to arrange a hearing aimed at dismissing a case filed by the US Securities and Exchange Commission (SEC) regarding alleged fraud. The request argues that the case represents an inappropriate application of US law beyond its borders and that the SEC has not provided sufficient evidence to support claims under US securities regulations.
The Eastern District Court of New York confirmed, "The court has received Defendants' letter requesting a pre-motion conference on their anticipated motion to dismiss the Complaint. The court grants that request and directs the parties to schedule the pre-motion conference.”
Gautam Adani serves as the chairman of the Adani Group, while Sagar Adani holds the position of executive director at Adani Green Energy.
This court ruling allows the Adani family to present their case for dismissing the SEC's complaint early on, potentially circumventing a lengthy discovery process and trial.
The SEC's case, initiated in November 2024, alongside a criminal complaint from the US Department of Justice, accuses the Adanis of attempting to pay over $100 million in bribes to Indian officials to secure solar energy contracts, while misleading US investors and banks during fundraising efforts.
Legal representatives for Gautam Adani and Sagar Adani argued in court that there is no credible evidence supporting the bribery allegations. They emphasized that the SEC lacks jurisdiction over the two individuals and that the alleged misstatements do not constitute actionable claims.
The Adani Group has categorically denied all accusations, asserting that none of its entities or executives have faced charges under the US Foreign Corrupt Practices Act, and that Adani Green Energy, the renewable energy division involved in fundraising, is not implicated in the case.
In their legal filings, Adani's team contended that the case lacks a solid jurisdictional foundation and fails to present actionable claims under US securities laws.
The request also claims that the SEC's assertions regarding a 2021 bond sale by Adani Green Energy are legally flawed for several reasons.
The $100 million bond sale was executed outside the US under Rule 144A and Regulation S exemptions, with securities sold to non-US underwriters and subsequently resold to qualified institutional buyers, they noted.
The Adanis maintained that the SEC does not have personal jurisdiction, arguing that neither individual had significant connections to the US or direct involvement in the bond offering.
The legal plea further stated that the complaint does not indicate that Gautam Adani approved the bond issuance, participated in key meetings, or directed any actions involving US investors.
Additionally, the plea pointed out that the SEC does not claim any investor losses, asserting that the bonds have matured, and Adani Green fully repaid all principal and interest to investors in 2024.
The filing also argues that the SEC's case is improperly extraterritorial, highlighting that the securities were not listed in the US, the issuer is Indian, and the alleged misconduct occurred entirely within India.
Referencing US Supreme Court precedents, the Adanis argued that the SEC failed to demonstrate any "domestic transaction," which is necessary for the application of US securities laws.
The plea further asserts that the SEC's charges against the Adanis do not clarify where irrevocable liability was incurred, and the mere fact that some downstream investors were located in the US is irrelevant to the case.
"The SEC's claims here solely involve Indian Defendants, an Indian issuer, securities not registered with the SEC and not traded on any US exchange, and underlying conduct alleged to have occurred exclusively in India," the plea stated. "This case is thus conclusively beyond the reach of US securities laws."
The defendants reiterated that the SEC does not allege any investor losses, noting that the bonds matured and were fully repaid with interest in 2024.
They also contested the bribery allegations, asserting that there is no credible evidence to support such claims.
"The alleged bribery scheme pertains to a solar energy project in India for the provision of renewable power in India. There is no claim that any US company bid on the project, or that any US customer purchased energy from it. In fact, there was no US involvement," the plea concluded.