NEW YORK — A U.S. federal judge has granted a request by Indian billionaire Gautam Adani to schedule a hearing on his motion to dismiss a Securities and Exchange Commission lawsuit alleging fraud, marking an early procedural win for the Adani Group.
In an order, the U.S. District Court for the Eastern District of New York said it would hold a pre-motion conference after receiving a request from the defendants seeking to challenge the complaint.
“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,” the court said.
The ruling allows Adani and his co-defendant, Sagar Adani, to argue that the SEC’s case should be dismissed at an early stage, potentially avoiding a lengthy discovery process and trial.
The SEC filed the case in November 2024, alongside a criminal complaint by the U.S. Department of Justice, alleging that the Adanis were involved in a scheme to pay more than $250 million in bribes to Indian officials to secure solar energy contracts. The complaint also alleges that the scheme was concealed from U.S. investors and financial institutions during fundraising.
Lawyers for Gautam Adani and Sagar Adani have denied the allegations, telling the court there is no credible evidence supporting claims of bribery. They also argued that U.S. regulators lack jurisdiction over the case and that the alleged misstatements do not qualify as actionable violations under U.S. securities laws.
The Adani Group has similarly rejected the allegations, stating that none of its entities or executives have been charged under the U.S. Foreign Corrupt Practices Act. It also said Adani Green Energy, the renewable energy arm involved in the fundraising, is not a party to the proceedings.
In court filings, the defense argued that the SEC’s case improperly attempts to apply U.S. securities laws to activities that occurred entirely outside the United States. The filings contend that the disputed $750 million bond sale by Adani Green Energy in 2021 was conducted offshore under Rule 144A and Regulation S exemptions, with securities initially sold to non-U.S. underwriters and only later resold to certain institutional investors.
The defendants also argued that neither Gautam Adani nor Sagar Adani had sufficient ties to the United States to establish personal jurisdiction, and that Gautam Adani was not directly involved in approving or marketing the bond issuance.
Additionally, the defense noted that the SEC has not alleged any investor losses, stating that the bonds matured and were fully repaid with interest in 2024.
The filings further contend that the case does not meet the legal threshold for a “domestic transaction,” a key requirement under U.S. law, emphasizing that the issuer is Indian, the securities were not listed on U.S. exchanges, and the alleged conduct took place in India.
The SEC’s claims “solely involve Indian defendants, an Indian issuer, securities not registered with the SEC and not traded on any U.S. exchange, and underlying conduct alleged to have occurred exclusively in India,” the filing said.
The court has not yet ruled on the merits of the motion to dismiss. (Source: IANS)
