The United States Securities and Exchange Commission (SEC) has moved a federal court for entry of proposed final judgments against billionaire industrialist Gautam Adani and Sagar Adani in a civil securities fraud case linked to a 2021 bond offering by Adani Green Energy Ltd. Under the proposed settlement, Gautam Adani would pay a civil monetary penalty of US$6mn (million), while Sagar Adani would pay US$12mn, taking the total penalties to US$18mn.
In
a release, US SEC says it had filed proposed final judgments by consent before the US district court for the eastern district of New York. "Without admitting or denying the allegations in the complaint, Gautam Adani and Sagar Adani each consented to the entry of final judgments, subject to court approval, that would permanently enjoin each from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the final judgments, if approved by the court, would order Gautam Adani and Sagar Adani to pay civil monetary penalties of US$6mn and US$12mn, respectively," SEC says.
Earlier on
20 November 2024, the US regulator had filed its complaint alleging that Gautam Adani, founder of Adani Green, and Sagar Adani, the company's executive director, orchestrated a scheme involving payment or promises of hundreds of millions of dollars in bribes to Indian government officials in exchange for commitments to purchase energy at above-market rates.
According to the SEC release, the alleged arrangement benefited Adani Green and was ongoing when the company launched a US$750mn bond offering in September 2021 that raised more than US$175mn from investors in the US.
The regulator alleged that Adani Green’s offering materials falsely highlighted compliance with anti-bribery and anti-corruption principles despite the alleged bribery scheme.
The proposed judgments would permanently restrain both Gautam Adani and Sagar Adani from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, as well as Rule 10b-5, which governs fraudulent and misleading statements in securities transactions.
The consent documents also state that the penalty amounts would be paid to the US Treasury and that neither defendant can seek reimbursement, indemnification, tax deductions or tax credits for the payments.
SEC further clarified that the civil settlement resolves only the claims brought in the SEC proceeding and does not address any potential criminal liability arising from the same facts.
SEC investigation was conducted by Nicholas Karasimas, Stewart Gilson and Christopher Colorado under the supervision of Alison Conn of the SEC’s New York regional office.
Meanwhile, a report published by
The New York Times (NYT) says the US department of justice (DoJ) may move to drop criminal charges against Gautam Adani in the coming days.
According to the report, prosecutors are considering withdrawing the case after Mr Adani hired a legal team led by Robert J Giuffra junior (Jr), one of US president Donald Trump’s personal lawyers and co-chairman of Sullivan & Cromwell.
The report says Mr Giuffra met justice department officials in Washington last month and presented arguments questioning both the evidence and US jurisdiction in the case.
The New York Times report further claimed that Mr Adani offered to invest US$10bn (billion) in the US economy and create 15,000 jobs if the charges were dropped, though prosecutors later indicated the proposal would not influence any decision regarding the criminal matter.
The newspaper reported that the DoJ’s possible retreat from the case may reflect the Trump administration’s broader shift away from aggressive foreign bribery enforcement rather than any political favour.
According to The New York Times report, even if criminal charges are withdrawn, Mr Adani could still face financial penalties from US agencies, including a possible settlement with the treasury department linked to a separate investigation concerning alleged Iranian gas shipments in violation of US sanctions.
Separately, US-based investment firm GQG Partners on Thursday sold 5.89mn shares, representing a 0.45% stake, in Adani Enterprises Ltd through an open market transaction valued at ₹1,435 crore.
According to NSE block deal data, GQG Partners Emerging Markets Equity Fund disposed of 5,892,423 shares at an average price of ₹2,435.60 apiece.
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