The Union Law Ministry has forwarded a summons from the US Securities and Exchange Commission (SEC) to an Ahmedabad court, seeking to serve it to industrialist Gautam Adani and his nephew Sagar Adani. The summons, which was issued under the Hague Convention on Service of Judicial and Extrajudicial Documents in Civil and Commercial Matters, 1965, pertains to allegations of securities fraud and a $265 million bribery scheme.
According to reports from The Hindu, the SEC, in coordination with federal prosecutors from the Eastern District of New York, has filed a lawsuit against Gautam Adani and Sagar Adani in the US District Court for the Eastern District of New York. The allegations state that the two executives, in their capacity as leaders of Adani Green Ltd, concealed hundreds of millions of dollars in bribes to Indian government officials to secure favorable energy contracts for Adani Green and Azure Power, a solar energy plant operator.
Summons Forwarded Under Hague Convention Protocols
As per the Hague Convention, India is obligated to assist in serving legal notices or summons to individuals if requested by another signatory country, such as the US. The Union Law Ministry reportedly forwarded the SEC’s summons in February to a sessions court in Ahmedabad to be served at Gautam Adani’s local address.
Sources confirmed that the Department of Legal Affairs (DLA), which functions under the Union Law Ministry, had initially denied receiving any such request when responding to an RTI application filed on February 19. However, in a subsequent response on March 3, the DLA acknowledged that the summons had already been forwarded to the Gujarat court on February 25.
Bribery Allegations and Market Impact
The lawsuit accuses Gautam Adani and Sagar Adani of securing above-market energy contracts through bribery, thereby misleading American investors. If proven, the allegations could lead to severe penalties under US securities laws and the Foreign Corrupt Practices Act (FCPA), 1977.
Despite the legal turmoil, the Adani Group is reportedly optimistic about the new US administration under President Donald Trump. The Trump administration has reportedly paused enforcement of the FCPA, creating hope within the Adani Group for a more favorable regulatory environment. According to The Financial Times, the group has already resumed exploring business opportunities in the US, anticipating reduced scrutiny from American regulators.
Legal Implications and Future Outlook
The lawsuit, if pursued aggressively, could lead to significant financial and reputational damage to the Adani Group. However, the group’s confidence in the changing US regulatory environment suggests it may seek to minimize potential fallout. The outcome of the case is expected to have wide-ranging implications for both the Adani Group and India-US business relations.
Government officials have yet to comment on the matter publicly, while the Adani Group has maintained that it complies with all legal and regulatory requirements.
