US may drop fraud charges against Gautam Adani: Sources

The US authorities are moving to resolve the allegations of fraud against Adani Group Chairman Gautam Adani and bring to an end the case which has been lingering for more than a year according to sourcesThe US Justice Department may announce the dropping of charges as early as this week Besides the Securities and Exchange Commission SEC is also moving to settle a parallel civil fraud case it brought against the billionaire industrialist and others in November 2024 according to people in the know of the matterWhile the Justice Department could effectively move to drop the charges with the defendants out of the country a resolution to the SEC would likely involve a monetary penalty sources saidThe case brought by the SEC alongside a criminal complaint by the Department of Justice alleges that the Adanis sought to pay over USD 250 million in bribes to Indian officials to secure solar energy contracts and concealed the scheme from US investors and banks when they raised fundsThe counsel for Gautam Adani and his nephew Sagar Adani stated in court that there was no credible evidence supporting the alleged bribery scheme They pointed out that the SEC lacked necessary jurisdiction over the two men and that the alleged misstatements underpinning the case werent actionableThe Adani Group has denied all allegations stating that none of its entities or executives has been charged under the US Foreign Corrupt Practices Act and that Adani Green Energy the renewable energy arm that raised the funds is not a party to the proceedingsLast month a US judge granted a request from Gautam Adani to schedule a hearing to dismiss the US SEC case of alleged fraud The plea states that the case represents an impermissible extraterritorial application of US law and that the SEC has failed to establish actionable claims under US securities lawsIn filings Adanis legal team has argued that the case lacks a sufficient jurisdictional basis and fails to establish actionable claims under US securities lawsThe plea also argues that the SECrsquos claims over a 2021 bond sale by the Grouprsquos renewable energy arm Adani Green Energy are legally flawed on multiple groundsThe USD 750million bond sale was conducted outside the United States under Rule 144A and Regulation S exemptions with securities sold to nonUS underwriters and only later resold in part to qualified institutional buyers they saidThe Adanis argued that the SEC lacked personal jurisdiction saying neither of them had sufficient contacts with the US or direct involvement in the bond offeringThe plea filed by the lawyers added that the complaint does not allege that Gautam Adani approved the issuance attended key meetings or directed any activity at US investorsThe plea also highlights that the SEC does not allege that there were any investor losses and there were none The bonds have matured and Adani Green repaid all principal and interest in full to investors in 2024 it addedThe filing also contends the SECs case is impermissibly extraterritorial noting the securities were not listed in the United States the issuer is Indian and the alleged misconduct occurred entirely in IndiaThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever