Finance – Adani Challenges SEC Lawsuit Over Jurisdiction and Legal Scope
Finance – The Adani Group has approached a US court seeking to dismiss a securities fraud case filed by the US Securities and Exchange Commission, arguing that the matter falls outside American legal jurisdiction.
Legal Move to Dismiss SEC Case
Billionaire industrialist Gautam Adani and his nephew Sagar Adani have formally contested a lawsuit brought by the US Securities and Exchange Commission (SEC), requesting its dismissal in a New York court. The case, initiated in November 2024, accuses them of misleading investors by not disclosing an alleged bribery arrangement linked to officials in India.
Through their legal representatives, the Adanis have denied all allegations and submitted a pre-motion letter ahead of a planned motion to dismiss scheduled for April 30. Their legal team argues that the complaint is fundamentally flawed and does not meet the standards required under US law.
Questioning US Court Jurisdiction
A central argument in their filing is that US courts lack personal jurisdiction over the defendants. According to the plea, neither Gautam Adani nor Sagar Adani has sufficient connections to the United States to justify legal proceedings there.
The dispute relates to a $750 million bond issuance by Adani Green Energy Ltd in 2021. The defense maintains that the transaction was conducted outside the US under exemptions that allow private placements to institutional investors and offshore buyers. The bonds were initially sold to non-US underwriters, who later resold a portion to qualified institutional buyers, including some in the United States.
The filing emphasizes that Adani Green itself was not involved in those secondary transactions and that the SEC has not established any direct engagement with US investors by the defendants.
Challenge to Extraterritorial Application of Law
Another key aspect of the defense is the argument that the SEC is attempting to apply US securities laws beyond their intended reach. The Adanis contend that the issuer is an Indian company, the securities were not listed on US exchanges, and the alleged conduct took place entirely within India.
Citing legal precedents, the filing states that US securities laws require proof of a domestic transaction. According to the defense, the SEC has not demonstrated where any binding financial obligation occurred within the United States, which is essential to establish jurisdiction.
No Evidence of Investor Harm
The defense also points out that the SEC has not claimed any financial losses suffered by investors. The bonds in question have already matured, and Adani Green Energy Ltd repaid both principal and interest in full by 2024.
This, according to the filing, weakens the foundation of the case, as investor harm is typically a critical component in securities fraud claims.
Disputing Bribery Allegations
The SEC’s case includes allegations of a bribery scheme related to solar energy contracts in India. However, the Adanis have rejected these claims, stating there is no credible evidence to support them.
Their lawyers further argue that the project in question involved no participation from US companies or customers, reinforcing their position that the matter does not fall under US jurisdiction.
Statements Described as General Corporate Claims
The filing also addresses statements cited by the SEC regarding environmental, social, and governance practices, anti-corruption measures, and corporate integrity. The defense characterizes these statements as general corporate messaging rather than specific guarantees that investors could rely upon.
They argue that such statements are too broad to be considered legally actionable and that the SEC has failed to link either defendant to any specific misleading communication.
Next Steps in Legal Proceedings
The pre-motion letter submitted on April 7 is a procedural step informing the court of the defendants’ intent to seek dismissal. The Adanis have indicated their willingness to participate in a pre-motion conference if the court decides to schedule one.
Their legal teams have reiterated that the complaint lacks sufficient detail to establish wrongdoing or intent, and they remain confident that the case does not meet the legal threshold required to proceed.