Adani Group Stocks Witness Sharp Decline Following SEC Legal Move
Shares of multiple Adani Group companies experienced significant downward pressure in today's trading session, with several key stocks dropping by as much as 10%. This market reaction comes in response to a crucial development in the United States, where the Securities and Exchange Commission has taken a decisive legal step against the Indian conglomerate.
SEC Seeks Alternative Service Method After Official Channels Fail
The US securities regulator has approached a federal court seeking authorization to serve summons directly via email to Gautam Adani, the founder and chairman of the Adani Group, and his nephew Sagar Adani. This request follows the SEC's acknowledgment that its previous attempts to deliver these legal documents through official diplomatic channels have been unsuccessful.
According to court filings referenced in a Reuters report, India has declined two separate requests from the SEC to serve the summons through established procedures. The Indian authorities reportedly cited procedural requirements related to signatures and seals as grounds for these rejections. The SEC has countered this position by asserting that such conditions do not apply under international frameworks governing cross-border legal service, including provisions of the Hague Convention.
Background of the Allegations and Market Impact
The legal proceedings stem from an indictment made public in November 2024, which alleges that executives of the Adani Group participated in a bribery scheme involving Indian officials. The purported objective of this scheme was to secure power purchase agreements for electricity generated by Adani Green Energy.
Beyond the bribery allegations, the SEC has also accused the Adani executives of misleading American investors by providing incorrect disclosures regarding the company's anti-corruption policies and procedures.
The market response to these developments has been pronounced:
- Adani Green Energy shares plunged 10% to reach an intraday low of Rs 823
- Adani Enterprises, the group's flagship company, declined 8% to touch Rs 1,936
- Adani Ports and Special Economic Zone stock fell 5% to Rs 1,343
- Adani Energy Solutions dropped 8% to Rs 852 per share
Legal Stance and International Implications
The Adani Group has firmly rejected all allegations contained in the SEC's filings, characterizing them as completely unfounded. The conglomerate has stated its intention to pursue all available legal avenues to defend its position and reputation.
This case represents one of the most significant legal matters involving an Indian corporate entity in the United States. The SEC has been attempting to serve notices on the Adani executives since last year, with the regulator now informing the court that it does not anticipate successful service through existing procedures.
In its December rejection, India's Ministry of Law and Justice reportedly raised questions about the SEC's authority to seek such service, adding another layer of complexity to this cross-border legal dispute. The SEC maintains that electronic service represents a reasonable alternative given the circumstances and the importance of advancing the legal proceedings.
The situation continues to develop as both legal teams prepare their next moves in what has become a closely watched international corporate governance case with significant implications for cross-border regulatory cooperation and corporate accountability standards.
