Adani Group chairperson Gautam Adani has moved a United States court seeking that a fraud case filed by the US Securities and Exchange Commission be dismissed on the grounds that it constituted an impermissible extraterritorial application of American law, PTI reported.
The commission had in November 2024 indicted Gautam Adani and his nephew Sagar Adani for allegedly orchestrating a scheme to bribe officials in India for solar energy contracts, and then misrepresenting the company’s anti-bribery practices to investors in the US.
The allegations of fraud are based on the alleged failure of Adani Green to disclose the scheme in documents related to a $750 million bond offering in 2021.
Gautam Adani and Sagar Adani, in their petition, claimed that the US Securities and Exchange Commission’s claims are legally flawed for several reasons, according to PTI. They contended that the Eastern District Court of New York, which is hearing the matter, lacks personal jurisdiction over the case, as neither of them had sufficient contact with the US, and were not directly involved in the bond offering.
They contended that the bond sale was conducted outside the United States, and the securities were sold to underwriters outside the US, PTI reported. The petition argued that it was only later that the securities were resold in part by the underwriters to qualified institutional buyers.
The complaint does not allege that Gautam Adani approved issuing the bonds, attended key meetings or ordered any activity linked to US investors, the Adani Group chairperson’s petition was quoted as saying.
The plea further said that the Adanis have disputed that there is any credible proof of the alleged bribery scheme.
“Notably, the SEC does not allege that there were any investor losses, and there were none,” PTI quoted the plea as having contended. “The bonds have matured, and Adani Green repaid all principal and interest in full to investors in 2024.”
The Adanis also argued that the Securities and Exchange Commission had not been able to show any “domestic transaction” in the US, which would be needed for US securities laws to apply.
On February 1, PTI reported that Gautam Adani and Sagar Adani had agreed to accept a legal notice from the US Securities and Exchange Commission in the case. This removed the need for a US judge to rule on how the industrialist should be served the legal notice.
In August, the commission had told the court in New York that India was yet to deliver summons to the two of them.
On November 27, 2024, the Adani Group said in a stock exchange filing that Gautam Adani and Sagar Adani had been charged in the US for securities fraud, not bribery.
The charges had hurt the group’s market value, with shares falling by $54 billion at the time.
The lawyers for the Adanis told Reuters that they will formally seek the dismissal of the case by April 30.
Also read:
What does US law say about Adani’s indictment – and can he be charged in India?
Adani US indictment: The Indian solar deals for which Rs 2,029 crore was allegedly paid in bribes
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