Adani Moves to Dismiss US SEC Fraud Case Over 2021 Bond Issue
Billionaire Gautam Adani and his nephew Sagar Adani have taken legal action to challenge a US securities fraud case, formally requesting a federal court in New York to dismiss the lawsuit filed by the US Securities and Exchange Commission (SEC). The case revolves around a 2021 bond issue by Adani Green Energy Ltd (AGEL), with the Adanis strongly denying any wrongdoing.
SEC Allegations and Adani Defense
In November 2024, the SEC sued Gautam Adani and Sagar Adani, alleging their involvement in a scheme to pay or promise hundreds of millions of dollars in bribes to Indian government officials to benefit Adani Green Energy. Both individuals hold executive and board roles at the company. The regulator's case focuses on claims that Adani Green failed to disclose this alleged bribery scheme in documents related to a $750 million bond offering in 2021.
However, in a filing before the Brooklyn federal court, the Adanis, through their lawyers, have firmly rejected these allegations. They stated that investors suffered no losses from the bond issue in question, as the bonds matured and were fully repaid with interest in 2024. The defense also disputes the underlying bribery claims, asserting there is no credible evidence to support them.
Jurisdiction and Legal Grounds for Dismissal
A central argument in the Adanis' defense is that the case falls outside US jurisdiction. They contend that the court lacks personal jurisdiction because neither Gautam nor Sagar Adani had sufficient contact with the United States or direct involvement in the bond offering. According to their filing, the $750 million bond issue was conducted outside the US under Rule 144A and Regulation S exemptions, with securities initially sold to non-US underwriters and only later partially resold to qualified institutional buyers.
The defense describes the SEC's claims as "impermissibly extraterritorial", emphasizing that both defendants are based in India, the alleged misconduct occurred entirely in India, and the bonds were never traded on a US exchange. They further argue that since the issuer is Indian and the securities were not listed in the US, US securities law should not apply.
Specific Legal Challenges and Next Steps
The Adanis' lawyers have raised several specific legal grounds for dismissal. They argue that the SEC's complaint does not specifically tie Gautam Adani to the bond issuance, failing to allege that he approved the issuance, attended key meetings, or directed activity aimed at US investors. Additionally, the defense says the SEC has not demonstrated a "domestic transaction", which they claim is necessary under US Supreme Court precedent for US securities laws to apply.
The filing also contends that the SEC has not linked either Gautam or Sagar Adani to specific misleading statements or shown any intent to defraud. Statements cited by the SEC regarding ESG commitments, anti-corruption standards, and corporate reputation are dismissed by the defense as non-actionable "puffery" or broad corporate optimism that investors could not reasonably rely on.
The Adanis are now seeking a full dismissal of the SEC case and have indicated their readiness to appear for a pre-motion conference if required, as they prepare to formally file their dismissal request by April 30.
