The US Justice Department is reportedly considering dismissing charges against Gautam Adani, the chairman of the Adani Group, according to a report by the New York Times. Previously, the US Securities and Exchange Commission (SEC) had accused Adani, along with Sagar Adani and others, of being involved in a bribery scheme exceeding $250 million between 2020 and 2024, allegedly to secure solar energy contracts in India. This development has caught attention as it may significantly alter the ongoing legal situation concerning the Adani Group.

The New York Times cites sources familiar with the case who suggest that the Justice Department’s deliberation to drop the charges is closely linked to changes in Adani’s legal representation. Adani recently brought on a new legal team led by Robert J. Giuffra Jr., a partner at the law firm Sullivan & Cromwell LLP, and a known lawyer for former President Donald Trump.

In a significant meeting last month at the Justice Department’s headquarters, Giuffra Jr. reportedly outlined arguments that suggested prosecutors lacked both the evidence and jurisdiction needed to pursue the case against Adani and the other defendants. Sources indicate that Giuffra Jr. proposed that potential investments from Adani, amounting to $10 billion and expected to create 15,000 jobs in the US, could be of interest if the charges were dropped.

Legal Proceedings and Recent Developments

The situation recently escalated when, on April 8, the U.S. District Court for the Eastern District of New York accepted a plea from Gautam and Sagar Adani’s legal team for a pre-motion conference aimed at dismissing the SEC’s complaint. Their counsel indicated a desire to advance a dismissal based on multiple legal grounds, including the lack of personal jurisdiction over the defendants and the assertion that the SEC’s claims do not extend to non-US entities.

In a letter submitted to the court, the defendants briefly outlined their rationale for seeking dismissal. They claimed that the SEC’s allegations were impermissibly extraterritorial, vague in nature, and did not provide any solid foundation for a reasonable investor’s reliance. Furthermore, it was argued that the defendants were not involved in the specific transactions alleged, thus barring the SEC’s claims against them.

The Adani Group’s legal counsel noted that during a bond offering in September 2021, worth $750 million, the transactions were conducted outside the US, thus falling under SEC Rule 144A and Regulation S exemptions for private resales to qualified institutional buyers. They asserted that while a fraction of these resales may have been made to investors within the US, the Adani Group itself was not a party to those transactions.

Defendants’ Grounds for Dismissal and Implications

The defendants assert that the SEC’s failure to establish jurisdiction is rooted in the fact that neither the Adani Group nor its entities conduct business activities within the US that would warrant legal oversight by American authorities. They argue that the allegations pertain strictly to Indian entities and events, which do not fall within US legal jurisdiction.

Furthermore, even if the claims were to be accepted at face value, the defendants maintain that the SEC’s complaint does not substantiate any legal violations necessary to pursue further legal action. They cited that the court cannot maintain jurisdiction over the claims, reiterating that the legal proceedings involve Indian defendants and activities that transpired exclusively in India.

The counsel pointed out that the SEC has not sufficiently established that the underwriters involved in the bond transaction were US institutions or that the agreement governing the subscriptions was based on US law, thereby undermining the SEC’s jurisdiction. This ongoing legal battle continues to unfold as details are revealed.

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