Billionaire Gautam Adani and his nephew Sagar Adani have petitioned a US court to throw out a securities fraud lawsuit filed by the US Securities and Exchange Commission (SEC). They argue that the lawsuit is beyond US jurisdiction and lacks evidence of any wrongdoing.
In a preliminary letter submitted before an upcoming motion to dismiss the lawsuit on April 30, the Adanis, represented by their legal team, criticized the SEC’s allegations concerning a bond sale in 2021 by Adani Green Energy Ltd (AGEL), a subsidiary of their conglomerate. They asserted that the SEC’s claims are legally flawed on multiple grounds.
The SEC initiated legal action against the Adanis in November 2024, accusing them of deceiving investors by concealing an alleged bribery scheme involving Indian state officials, and invoking US securities laws in the case.
The Adanis countered by asserting that the court lacks personal jurisdiction due to their limited connections with the US and lack of direct involvement in the bond issuance. They clarified that the USD 750 million bond sale was executed outside the US under Rule 144A and Regulation S exemptions, with the securities initially sold to non-US underwriters and later partially resold to qualified institutional buyers.
Furthermore, the defense argued that the SEC’s case has an impermissible extraterritorial reach, emphasizing that the securities were not traded in the US, the issuer is an Indian company, and the alleged misconduct occurred solely in India.
Referring to US Supreme Court precedents, the defendants contended that the SEC had not demonstrated any “domestic transaction,” a prerequisite for applying US securities laws. They highlighted that there were no investor losses as the bonds matured and were fully repaid with interest in 2024.
The Adanis also disputed the bribery accusations, asserting the lack of credible evidence to support such claims. They dismissed the SEC’s references to ESG commitments, anti-corruption measures, and corporate reputation as mere “puffery” – general corporate optimism that investors should not rely upon.
Moreover, they challenged the SEC’s failure to establish a direct link between the defendants and specific misleading statements or intent to defraud. The Adanis are requesting the complete dismissal of the lawsuit and expressed their willingness to participate in a pre-motion conference if necessary.