New York, April 8 (IANS). The US court has accepted billionaire industrialist Gautam Adani’s plea seeking to schedule a hearing to dismiss the alleged fraud case filed by the US Securities and Exchange Commission (SEC). The petition says the case is an unfair application of U.S. law and that the SEC has failed to establish actionable claims under U.S. securities laws.
The Eastern District Court of New York said in its order, “The Court has received plaintiffs’ letter requesting a meeting for a pre-motion conference on their possible motion to dismiss the complaint. The Court grants this request and directs the parties to schedule a meeting for a pre-motion conference.”
Gautam Adani is the chairman of Adani Group, while Sagar Adani is the executive director at Adani Green Energy.
The court’s decision to allow the hearing has given the Adani family an opportunity to argue that the regulator’s complaint should be dismissed at an early stage, thereby avoiding a lengthy investigative process and litigation.
The criminal complaint, filed by the SEC in November 2024 and filed by the US Justice Department, alleges that the Adani family tried to bribe Indian officials to the tune of more than $250 million to win solar power contracts and hid the scheme from US investors and banks while raising the funds.
Lawyers for Gautam Adani and his nephew Sagar told the court that there was no credible evidence to support the alleged bribery scheme. He pointed out that the SEC does not have the necessary jurisdiction over these two individuals and that the alleged misrepresentations that form the basis of the case are not actionable.
Adani Group has denied all allegations, saying none of its units or executives have been charged under the US Foreign Corrupt Practices Act, and the group’s renewable energy sector company Adani Green Energy, which raised the funds, is not a party to the proceedings.
In its petition, Adani’s legal team has argued that the case lacks sufficient jurisdictional grounds and has failed to establish actionable claims under US securities laws.
The petition also argues that the SEC’s claims on the bond sale conducted by the group’s renewable energy company Adani Green Energy in 2021 are legally flawed on several grounds.
He said $750 million of the bond sales were conducted outside the United States under Rule 144A and Regulation S exemptions, in which the securities were sold to non-US underwriters and later resold to partially qualified institutional buyers.
The Adani family argued that the SEC lacked personal jurisdiction because they said none of them had substantial contacts with the US nor had any direct involvement in the bond sale.
The petition filed by the lawyers said that the complaint does not allege that Gautam Adani approved the bond issue, participated in important meetings or directed any activity targeting American investors.
The petition also said, “The SEC does not allege that investors suffered any losses, and in fact no losses occurred. The bonds have matured, and Adani Green has paid the full amount, including principal and interest, to investors in 2024.”
The petition also argues that the SEC’s case is improperly without jurisdiction, because the securities were not listed in the United States, the issuer is Indian, and the alleged misconduct occurred entirely in India.
Citing a prior US Supreme Court decision, Adani said the SEC had failed to prove a “domestic transaction”, a prerequisite to enforce US securities laws.
The petition further states that the SEC’s charges against Adani do not specify where the irreparable liability arose and the fact, even if accepted as true, that some of the downstream investors were based in the US is irrelevant to the case.
“The SEC’s claims relate only to the Indian defendants, an Indian issuer, securities not registered with the SEC and not traded on any U.S. exchange, and the underlying conduct allegedly occurring in India,” the petition said. “This case therefore clearly falls outside the scope of US securities laws.”
The defendants also said the SEC does not allege any investor losses, and said the bonds had matured and been repaid in full with interest in 2024.
He also denied allegations of bribery, and said there was no credible evidence supporting such claims.
“The alleged bribery case relates to a solar energy project to supply renewable energy to India. There is no allegation that any US company bid for the project, or that any US customer purchased energy from the project. In fact, there was no US involvement,” the petition said.
–IANS
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