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US court allows pre-motion hearing in SEC case against Adani Group
The Adanis argued that the US court lacks jurisdiction and that the complaint fails to establish any wrongdoing.
A United States court has allowed a pre-motion conference in the securities case against the Adani Group, with billionaire Gautam Adani and his nephew Sagar Adani seeking dismissal of the lawsuit filed by the US Securities and Exchange Commission (SEC).
The US district court for the Eastern District of New York on April 7 granted the defendants’ request to hold a pre-motion conference before filing a motion to dismiss. The order was passed by judge Nicholas G Garaufis, who directed both sides to confer and schedule the hearing.
The case, ‘SEC v. Adani et al’, arises from a complaint filed by the SEC in November 2024 alleging securities fraud linked to a 2021 bond issuance by Adani Green Energy Ltd. The SEC had sued alleging they misled investors by failing to disclose an alleged bribery scheme tied to Indian state officials, framing the case under US securities laws.
In a pre-motion letter, the Adanis argued that the US court lacks jurisdiction and that the complaint fails to establish any wrongdoing. They said neither had sufficient contacts with the United States or direct involvement in the bond offering.
The defendants stated that the USD 750 million bond sale was conducted outside the US under Rule 144A and Regulation S exemptions, with securities sold to non-US underwriters and later resold in part to qualified institutional buyers.
They contended that the SEC’s case is extraterritorial, as the securities were not listed in the US, the issuer is an Indian company, and the alleged misconduct occurred entirely in India. Relying on precedent of the US Supreme Court, they argued that the regulator failed to establish a “domestic transaction”, a requirement for invoking US securities laws.
The filing stated that the SEC does not allege any investor losses and noted that the bonds matured and were repaid with interest in 2024.
The defendants also disputed allegations of a bribery scheme involving Indian officials, stating there is no credible evidence. They said the statements cited by the SEC on ESG commitments, anti-corruption practices and corporate reputation amount to non-actionable corporate optimism and cannot be relied upon by investors.
They further argued that the complaint does not show that Gautam Adani approved the issuance, attended key meetings or directed any communication at US investors, nor does it establish intent to defraud.
The defendants have sought dismissal of the complaint in full and indicated readiness to appear for the pre-motion conference, which will determine whether the case proceeds to a formal motion stage.
