Adani Group Chairman Gautam Adani. File
| Photo Credit: PTI
Despite U.S. President Donald Trump’s executive order to hit the pause button on the U.S. anti-bribery law — a move viewed as a big relief for Indian billionaire and top industrialist Gautam Adani — the U.S. Securities and Exchange Commission (SEC) has now written to Indian authorities to serve a complaint on the Adani Group founder and his nephew Sagar Adani for their alleged involvement in securities fraud and a $265 million bribery scheme, according to a court filing.
The SEC told a New York district court on Tuesday that it was taking steps to serve its complaint to both the Adanis, defendents in the case, and that it has sought the help of India’s Union Ministry of Law and Justice in this regard.
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“Defendants are located in India and the SEC’s efforts to serve them there are ongoing, including a request for assistance to Indian authorities to effect service under the Hague Service Convention for Service Abroad of Judicial and Extrajudicial documents in Civil and Commercial matters,” the SEC said in its filing.
‘No time limit to serve complaint’
In November 2024, the SEC had filed a complaint alleging that the defendants violated the anti-fraud provisions of the federal securities law “by knowingly or recklessly making false and misleading representations concerning Adani Green Energy Ltd in connection with a September 2021 debt offering by Adani Green.” In a related criminal case arising from the same alleged facts, the United States Attorney of the Eastern District of New York has charged the defendants with, among other things, conspiracy and securities fraud, the SEC filing said.
Because the defendants are located in a foreign country, outside the United States, there is no time limit to serve the summons and complaints as per Rule 4(f) of the Federal Rules of Civil Procedure, the SEC said.
The U.S. regulator said it has requested assistance from India’s law and justice department, and the process is ongoing. “SEC will continue its efforts to serve Defendants,” it reiterated.
Executive order not retrospective
Earlier this month, Mr. Trump signed an executive order pausing the Foreign Corrupt Practices Act of 1977 for a period of at least 180 days, until the new U.S. Attorney General completes a review of the legislation.
Given the SEC’s fresh filing with the court, it now appears that the executive order did not have retrospective effect. Thus, the SEC probe into the Adanis seems likely to continue unless and until the law is amended.
People familiar with the development said that the Indian authorities will take their time to act or even ask for concrete proof from the SEC before serving the U.S. regulator’s complaints to the Adanis, and this is likely to be a long drawn out process.
After meeting with Mr. Trump on his trip to Washington last month, Prime Minister Narendra Modi told journalists that the two leaders did not discuss the Adani case as it was an “individual issue”.
Small investors hit by Adani stock losses
Adani group stocks came under selling pressure in the markets on Tuesday and became a trading opportunity for big traders. While Adani Enterprises lost 2%, Adani Green Energy fell nearly 4%, Adani Power dipped 0.5%, Adani Energy Solutions dropped 1%, and Adani Ports was down 0.3% on the BSE.
Stock analyst Arun Kejriwal said it was small investors who suffered losses. “Any time some news on Adani hits the market, its group stocks became a subject matter of trading opportunity for big fund houses and ultimately the small investors bear the brunt,” he said.
Published – February 19, 2025 06:32 am IST
