In a significant legal development, a United States court has dropped securities and wire fraud charges against Indian billionaire Gautam Adani and two other executives, marking a conclusion to the criminal proceedings against them. On August 11, Judge Nicholas G. Garaufis of the US District Court for the Eastern District of New York approved the US Department of Justice’s (DOJ) motion to dismiss all charges against Gautam Adani, Sagar Adani, and Vneet Jaain. The charges included securities fraud conspiracy, wire fraud conspiracy, and securities fraud.
Despite accepting the DOJ’s proposal, Judge Garaufis criticized the process as “highly unusual,” noting that the decision was made largely in cooperation with defense counsel, seemingly without adequate input from FBI and SEC investigators or the attorneys involved in bringing the case. This concern was highlighted in the court order, emphasizing the unorthodox nature of the DOJ’s actions.
The dismissal follows multiple affidavits submitted by both Adani and the DOJ over a two-month period. Since Gautam Adani was not charged under the Foreign Corrupt Practices Act (FCPA) or with obstruction of justice, no further criminal charges are pending against him in this indictment.
However, the court has not yet decided on the DOJ’s request to dismiss FCPA conspiracy charges against Ranjit Gupta, Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra, and Rupesh Agarwal. The obstruction charges against all except Gupta also remain unresolved, as the DOJ has not sufficiently justified their dismissal.
The case initially accused Gautam Adani, along with other executives, of orchestrating a scheme to bribe Indian government officials to secure contracts for a 12-gigawatt solar power project. Prosecutors alleged that bribes totaling ₹2,029 crore (approximately $265 million) were promised to officials of state electricity distribution companies, with ₹1,750 crore allegedly allocated for officials in Andhra Pradesh to secure seven gigawatts of solar power.
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Judge Garaufis previously required the DOJ to clarify its reasons for seeking the dismissal of charges against all eight defendants. The DOJ later provided explanations for its decision, which the court partially accepted. The court found that the alleged claims about Adani Green Energy’s anti-bribery policies and governance were too broad to substantiate a fraud prosecution, categorizing them as “inactionable puffery.” These statements, including a “zero tolerance” policy towards corruption, were deemed general corporate assurances rather than specific investor representations.
However, the court rejected several other DOJ arguments, such as the case’s predominantly foreign nature, the absence of findings by Indian authorities, the lack of investor financial loss, and the improbability of the accused appearing in a US court. Upon examination, the court found that the Indian decisions cited by the DOJ did not support their claims, as they did not result from investigative actions or address the US allegations meaningfully.
Judge Garaufis reviewed three Indian judicial decisions that were referenced by the DOJ:
- A Competition Commission of India decision from a private complaint alleging collusion in solar power generation and distribution.
- A Delhi High Court decision concerning public interest litigation on solar project bidding irregularities.
- A Bombay High Court decision from a petition seeking an investigation into alleged bribery.
According to the court, none of these decisions pertained to the alleged false representations made to US lenders and investors. They also did not examine accusations of evidence destruction or misinformation given to US authorities.
The court order also noted that during settlement discussions, Gautam Adani’s legal team suggested that the Adani Group’s planned $10 billion investment in the US could be part of a resolution. However, this proposal was rejected by the US Attorney’s Office, and the court confirmed that this investment did not influence the DOJ’s dismissal decision.
Ultimately, the court accepted the DOJ’s proposal to dismiss charges against Adani but required the DOJ to provide further rationale for dismissing FCPA and obstruction charges against the other defendants by August 31. The defendants’ lawyers must also confirm their agreement with the proposed dismissal by the same date.
Gautam Adani, Sagar Adani, and Vneet Jaain were represented by Sullivan & Cromwell LLP, with Robert J. Giuffra Jr. and James McDonald leading the defense. Notably, Robert Giuffra is also the personal lawyer for former US President Donald Trump. Other defendants were represented by a team of distinguished lawyers from various international law firms.
