The securities fraud case against the Adani Group has seen a major breakthrough in the legal action as a United States court has allowed a pre-motion conference. Gautam Adani, a billionaire, and his nephew, Sagar Adani, have moved to have the lawsuit dismissed claiming that the case is not jurisdictional and does not have any legal merit.
On April 7, the defendants had their request granted by the US District Court of the Eastern District of New York under the leadership of Judge Nicholas G Garaufis to have a pre-motion conference before submitting a formal motion to dismiss. Both the parties have been instructed by the court to organize and schedule the hearing.
The matter is the result of a complaint made by the SEC in November 2024 that charged Adani Green Energy Ltd with the securities fraud involving a 750 million bond issue in 2021. The regulator accuses that investors were duped by the absence of disclosure of a bribery scheme that was reported to have existed between Indian officials.
The Adanis have reacted by vehemently denying the accusations arguing that the US court has no jurisdiction in the case. They claim that they had issued bonds outside the United States in exemptions under Rule 144A and Regulation S and had sold securities to non-US underwriters in the first place and only resold them partially.
The defence has also made reference to the US Supreme Court precedents by claiming that the SEC has not proven a domestic transaction which is a major condition to apply the US securities laws. The case proceeds to an important hearing that may spell its doom or otherwise.