By Suresh Unnithan
The Summons issued against Gautam Adani and Sagar Adani by a US district court is again in the news. Thanks, the said summons has not been officially served (according to information) to the respondents based in India. The summon was issued against the accused- Gautam Adani and Sagar Adani- on November 20, 2024, in a case filed by the US Securities and Exchange Commission (SEC) and the US Department of Justice (DOJ). The SEC and the DOJ have filed civil and criminal cases in the Court of Eastern District of New York, against Gautam Adani, his nephew Sagar Adani, and other executives linked to Adani Green Energy Ltd. and Azure Power Global Ltd on charges of a massive bribery scheme to secure favorable solar energy contracts in India.
There are both civil and criminal proceedings initiated against the Indian billionaire Adanis. The civil case deals with the violation of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934, and Rule 10b-5, which are anti-fraud provisions of the US. Federal Securities Laws. The Adanis are also accused of “Aiding and abetting violations of Section 17(a)(2) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5(b)”
The SEC alleges that the Adanis organised a bribery scheme involving payments or promises of hundreds of millions of dollars (about $200 million) to Indian government officials to secure above-market energy purchase agreements. This occurred during a September 2021 bond offering by Adani Green Energy, which raised $750 million, including $175 million from US investors. The offering documents allegedly contained materially false or misleading statements about the company’s anti-corruption and anti-bribery efforts.
The SEC has in its plaint sought permanent injunctions, civil penalties, and officer-and-director bars against Gautam and Sagar Adani.
Criminal Charges: Gautam Adani, Sagar Adani, and Vneet Jaain (Adani Green Energy executives) are charged with conspiracy to commit securities fraud, conspiracy to commit wire fraud, and substantive securities fraud in a five-count indictment.
The DOJ alleges the accused were engaged in a multi-billion-dollar scheme to deceive US investors and global financial institutions through false statements, raising over $3 billion in loans and bonds, including two US dollar-denominated syndicate loans (over $2 billion) and two Rule 144A bond offerings (over $1 billion, including $175 million from U.S. investors).
The indictment claims the defendants concealed the bribery scheme, which involved paying or promising $265 million in bribes to Indian officials to secure contracts expected to yield $2 billion in profits over 20 years for India’s largest solar power project.
Other Defendants (Cyril Cabanes, Saurabh Agarwal, Deepak Malhotra, Ranjit Gupta, and Rupesh Agarwal are charged with conspiracy to violate the The Foreign Corrupt Practices Act (FCPA), a US. Federal Law enacted in 1977 that prohibits US companies, citizens, and certain foreign entities from bribing foreign government officials to obtain or retain business.
Cabanes, Agarwal, and Malhotra, are also accused of conspiracy to obstruct justice by interfering with investigations by the DOJ, FBI, and SEC.
The cases were framed on the basis of the following evidences:
Sagar Adani allegedly kept detailed “bribe notes” on his phone, documenting payments to officials in states like Andhra Pradesh, Odisha, and Tamil Nadu. For example, a $200 million bribe was allegedly offered to Andhra Pradesh officials for a 7,000 MW power contract.
Other evidence includes documented meetings, electronic communications, and analyses (PowerPoint and Excel files etc) detailing bribe payments.
Based on the evidence presented the Court issued arrest warrants against Gautam and Sagar Adani, to be shared with foreign law enforcement authorities, as they are not in US custody and reside in India. “The arrest warrants against Gautam Adani and Sagar Adani were issued by a US court in New York and unsealed on October 31, 2024, following their indictment on November 20, 2024, by the US Department of Justice for an alleged $265 million bribery and fraud scheme.” The unsealing was ordered by Judge Robert M. Levy to allow the warrants to be shared with foreign law enforcement agencies, as reported by India Today and other sources.
However, in a recent public appearance Gautam Adani, the head of the Adani group has denied the allegations, asserting that they are “baseless” and emphasizing their commitment to “global standards of governance” and compliance. He has assured cooperation with legal processes but maintains that compliance frameworks are “non-negotiable.” Additionally, the group has clarified that Gautam and Sagar Adani are not charged with bribery or Foreign Corrupt Practices Act (FCPA) violations, but rather with securities and wire fraud-related counts, which they intend to contest. “Any intention to defy the proceedings suggests they may challenge the court’s jurisdiction, the validity of service, or the merits of the case without appearing in court.”
According to a, expert in US legal proceedings, in the event of non-compliance with a summons and a stated intent to defy proceedings, “the U.S. court would follow established procedures under the Federal Rules of Civil Procedure (FRCP), particularly Rule 4(f) for foreign defendants, and consider the international context of the Hague Service.”
He says, “The court may not immediately penalize the Adanis for non-compliance, as they have not been officially served. However, their public statements of defiance (refuting charges and vowing legal recourse) may prompt the court to scrutinize whether they or their counsel have received informal notice (via the SEC’s direct outreach to their counsel) and are deliberately evading service.”
If the Indian authorities eventually serve the summons and the Adanis fail to respond within 21 days (per FRCP Rule 12), the SEC could move for a default judgment. This would allow the court to rule in the SEC’s favor without a trial, potentially imposing permanent injunctions, civil penalties, and officer-and-director bars as sought in the complaint.
Legal experts feel that the Adanis’ defiance, as expressed through their intent to pursue “all possible legal recourse,” suggests they may file a motion to dismiss (if they engage with the court) on grounds such as: Lack of Jurisdiction, Improper Service, Merits of the Case.
In such a development “the court, presided over by Judge Nicholas Garaufis for both civil and criminal cases, would hold a hearing to evaluate such motions. If the Adanis refuse to appear, their counsel could still file motions on their behalf. A dismissal could occur if the court finds insufficient U.S. nexus or improper service, but the SEC’s allegations of $175 million raised from U.S. investors strengthen the court’s jurisdictional claim.”
According to legal experts, in the event of conviction Aanis can be imposed a jail term of up to 10 years or even more. “While the statutory maximum is 34 years, Gautam Adani would likely receive far less time if convicted, due to judicial discretion and practical considerations.”
Many share similar feelings, “even if convicted, Adani would probably receive far less time, with the sentence determined by the judge (e.g., Judge Nicholas Garaufis). Sentences in fraud cases often range from 5–10 years for high-profile defendants with no prior convictions, depending on the loss amount and plea negotiations.”
Nevertheless, the proceedings in the US court have adversely affected Adnai’s business in total. “The US court case has significantly impacted the Adani Group’s business, causing a $27 billion to $34 billion market value loss, canceling a $600 million bond offering, and triggering credit rating downgrades. Globally, the group faces setbacks with canceled deals in Kenya, reviews in Bangladesh, and paused investments by TotalEnergies, alongside challenges in raising international capital. These effects threaten Adani’s ambitious growth plans, including its $9 billion capex and $10 billion U.S. investment goals, and could delay India’s renewable energy targets. Long-term, the group may pivot to domestic funding and rely on its diversified portfolio, but reputational damage and legal uncertainties pose ongoing risks.”
However, optimism rules the market. “A shift in US policy under the Trump administration, including a pause on FCPA enforcement, could ease pressure on Adani, with stocks surging up to 6% as of April 2025.”