US Court Reviews Adani Family's Plea to Dismiss SEC Fraud Case
Court Hearing Scheduled for Adani Securities Fraud Case
A court in the United States has agreed to consider a request from Gautam Adani and Sagar Adani to dismiss a securities fraud lawsuit initiated by the US Securities and Exchange Commission (SEC). On April 7, Judge Nicholas G Garaufis from the Eastern District Court of New York approved the defendants' appeal for a pre-motion conference. The court has instructed both parties to arrange a hearing before the Adanis officially file to dismiss the case by April 30.
The SEC's lawsuit, filed in November 2024, accuses Gautam Adani and his nephew Sagar of misleading investors by not disclosing an alleged bribery scheme involving Indian officials. This controversy is associated with a $750 million bond offering by Adani Green Energy Ltd in 2021. The Adani Group has categorically rejected these allegations, labeling them as "baseless."
In their legal plea, the Adanis contended that the SEC's case is fundamentally flawed on several legal fronts. They asserted that US courts lack jurisdiction since neither individual had significant ties to the United States or direct involvement in the bond issuance. They emphasized that the bond sale occurred outside the US under Rule 144A and Regulation S, with securities initially sold to non-US underwriters and only later partially resold to select US investors without Adani Green's involvement.
The filing further argued that the SEC did not demonstrate a "domestic transaction," which is essential under US securities law. Additionally, it claimed that the case improperly applies US law to a situation involving Indian nationals, an Indian corporation, and events that transpired entirely in India.
The Adanis also highlighted that the SEC has not claimed any investor losses. According to their plea, the bonds matured in 2024, and Adani Green fully repaid both principal and interest. The filing noted that the regulator has not connected either Gautam or Sagar Adani to any specific misleading statements or demonstrated intent to deceive.
Conversely, the SEC has alleged that the Adanis misled investors by concealing information about a bribery scheme involving Indian state officials, linking this to the 2021 bond issuance. Additionally, US prosecutors have alleged a separate $250 million bribery scheme aimed at securing solar energy contracts in India.
At this stage, the court has only permitted a hearing, providing the Adanis a chance to argue for an early dismissal of the case.