A US court has accepted a preliminary plea from Gautam Adani and his nephew Sagar Adani seeking dismissal of a securities fraud case filed by the US Securities and Exchange Commission (SEC).
In an order dated April 7, Judge Nicholas G Garaufis of the Eastern District of New York allowed the defendants to proceed with a pre-motion conference, a procedural step before filing a formal motion to dismiss. The court has asked both sides to coordinate and schedule the hearing, with the dismissal motion expected by April 30.
The SEC had filed the lawsuit in November 2024, alleging that the Adanis misled investors by failing to disclose an alleged bribery scheme involving Indian state officials. The case is linked to a $750-million bond issuance by Adani Green Energy Ltd in 2021.
The Adani Group has denied the allegations, maintaining that the charges are baseless.
In their filing, the Adanis have argued that the SEC’s case is legally untenable and that US courts lack jurisdiction.
They contended that:
The bond issuance was conducted outside the US under Rule 144A and Regulation S
The securities were initially sold to non-US underwriters
Any subsequent resale to US-based institutional investors occurred without the involvement of Adani Green
The defence also stated that the SEC failed to establish a “domestic transaction”, a key requirement under US securities law, and did not demonstrate where legal liability or ownership transfer occurred within the US.
The plea further argued that:
The bonds matured in 2024 with full repayment of principal and interest
The SEC has not alleged any investor losses
There is no direct link between the Adanis and any misleading statements or intent to defraud
The filing described the case as an attempt to apply US securities law extra-territorially, involving Indian entities, offshore transactions, and alleged actions that took place entirely in India.
Separately, US federal prosecutors have alleged a $250-million bribery scheme tied to solar power contracts in India, claiming that inducements were offered to secure deals.
The SEC’s civil case draws on similar allegations, asserting that such actions were not disclosed to investors during the bond offering.
With the court allowing the pre-motion process, the focus now shifts to the formal dismissal plea later this month, which could determine whether the case proceeds to trial or is thrown out at an early stage.