Adani group stocks failed to rally despite a US judge permanently dismissing criminal charges against founder and chairman Gautam Adani in US securities fraud case. According to ET Now, six of the seven Adani-branded stocks slipped on Tuesday even after the court victory, with AWL Agri Business leading declines at 1.66% to ₹192.87, followed by Adani Power at 1.06% and Adani Ports and Special Economic Zone at 1.01%. The selling was broad but shallow, with no stock in the branded complex moving more than 2%. Adani Green Energy, Adani Enterprises, and Adani Energy Solutions each shed less than 0.8%, while flagship Adani Enterprises closed at ₹2,988 and Adani Total Gas alone finished higher, edging up 0.74% to ₹665. As per Business Standard, this court ruling could allow billionaire Adani to expand his businesses in the US, though analysts caution against treating the court order as a standalone buy signal.
US District Judge Nicholas Garaufis of the Eastern District of New York has delivered a permanent legal victory by approving the Justice Department's Rule 48(a) motion to dismiss Counts Two, Three and Four with prejudice. According to The Times of India, these counts related to securities fraud conspiracy, wire fraud conspiracy and securities fraud, and cannot now be brought again. The judge ruled that the compliance statements in the company's financial documents were legally insufficient to sustain any claims of securities fraud, observing that the corporate pledges were "more akin to statements regarding compliance with general legal obligations than a specific set of criteria on which an investor would reasonably rely in deciding whether to purchase the securities." The court's order confirmed that the defense consented to the resolution and there was no evidence of foul play, effectively closing the chapter on the fraud allegations for the conglomerate's top leadership. The ruling brought the criminal proceedings to an end before the case went to trial, as no witnesses testified, no evidence was examined in court and the judiciary made no findings on the underlying criminal allegations.
US prosecutors had accused Adani and other executives of participating in a scheme to pay bribes to Indian government officials to help secure lucrative contracts for a solar energy project. As reported by Reuters, Adani was charged in 2024 with agreeing to bribe Indian government officials so a subsidiary of his Adani Group could win approval to develop a solar energy plant, then misleading U.S. investors by providing reassuring information about his company's anti-corruption practices. The case centred on Adani Green Energy Ltd. and another company involved in an arrangement to sell around 12 gigawatts of solar power to the Indian government. The core allegation involved Adani and his associates paying more than $250 million in bribes to Indian government officials to secure solar energy supply contracts. According to PTI, prosecutors also alleged that investors were misled while the group raised more than $3 billion through loans and bond issuances in US markets. The DOJ's original 54-page indictment alleged that between 2020 and 2024, the defendants were involved in three broad schemes: paying about $265 million in bribes to Indian government officials to secure solar-energy contracts, misleading US and international investors to raise billions of dollars, and obstructing US investigations. The DOJ's original case alleged that disclosures to US bondholders had failed to mention payments in India linked to contracts for solar projects secured by the Adani group, but as per senior advocate Mahesh Jethmalani, the DOJ has now said there was 'no prosecutable evidence' for the alleged charges.
The Justice Department said it had decided, in its prosecutorial discretion, not to devote additional resources to the criminal charges after an extensive review. According to The Times of India, in its submissions, the department argued that pursuing the prosecution was no longer in the interests of justice, pointing to substantial jurisdictional and evidentiary hurdles, the fact that the alleged conduct was predominantly linked to India, the examination of the matter by Indian authorities, the absence of identified investor losses and broader public-interest considerations. The Justice Department also told the court that the indictment, which was unsealed in November 2024 during the final weeks of the Biden administration, had little realistic chance of reaching trial and appeared to be a politically driven 'name and shame' exercise' initiated by the outgoing administration. Before granting the request, Judge Garaufis instructed the Justice Department to publicly set out its reasons for seeking dismissal and directed the defendants to submit sworn declarations confirming that no promise, offer, quid pro quo or undisclosed agreement had influenced the department's decision. In its ruling, the court held that the Justice Department had satisfied the legal standard for dismissal on the basis that the alleged statements concerning Adani Green's anti-corruption policies and corporate compliance could be viewed as 'inactionable puffery'—generalised statements that investors could not reasonably rely upon—thereby creating legal challenges for pursuing the prosecution. The court's order confirmed that there was 'no concern for prosecutorial harassment,' or a 'cat-and-mouse ploy to keep a defendant constantly under indictment,' effectively closing the chapter on the fraud allegations.
Adani Group Chairman Gautam Adani on Wednesday said the dismissal of the US criminal case has left him with humility rather than triumph, saying the experience reinforced his faith in the rule of law and the importance of honouring commitments through periods of adversity. Speaking to employees and partners in the second edition of Apni Baat, Apno Ke Saath, Adani reflected on the Hindenburg Research allegations of 2023 and the subsequent US Justice Department case, expressing gratitude and reaffirming his commitment to the judicial process. He wrote, 'I welcome the US court's decision with humility and deep respect for the judicial process. Throughout this challenging period, our faith in truth, fairness and the rule of law remained unwavering. My deepest gratitude to those who never lost faith in us, in the system and in India's capacity for justice. We will continue doing what matters: building for our nation, creating value that outlasts us and serving a purpose larger than ourselves. That is our commitment.' Adani also expressed his commitment to continue building for the nation and creating value that outlasts him. As reported by Reuters, in a sworn declaration filed on July 15, Adani acknowledged that he had previously pledged to invest $10 billion in the United States before the charges were unsealed in November 2024. He also said his lawyers had told Justice Department officials during meetings that the investment pledge 'might be part of a resolution of these matters,' though he denied knowing of any agreement linking the investment to the dismissal of indictment. Following its review, the court concluded that the investment was independent of the dismissal and had no connection with the DOJ's decision, with senior advocate Mahesh Jethmalani emphasizing that this brings the criminal proceedings to a complete end and the case cannot be revived by the US Department of Justice or another US securities authority.
The legal saga concluded with Gautam Adani paying a $6 million civil penalty and Sagar Adani paying $12 million in the SEC's civil case, which was resolved on August 10 through final judgments entered with their consent, without admitting the allegations. According to Business Standard, Adani Enterprises has also settled the separate sanctions matter for $275 million with the US Treasury Department's Office of Foreign Assets Control (OFAC). AGEL's exchange filing says the judgment 'disposes of the SEC's civil complaint' and records that there is 'no material adverse impact' on the company's financial, operational or other activities. The criminal and civil proceedings ended in very different ways - the criminal case was dismissed by the court after the DOJ chose not to pursue it further, while the SEC case ended through consent judgments involving monetary penalties and injunctions. The court's comprehensive analysis revealed significant findings beyond the dismissal itself, with Jethmalani highlighting that another key finding related to anti-bribery and compliance statements cited in the alleged misrepresentation case, noting that the court found these statements to be 'generic corporate language' rather than specific representations that could have induced investors to buy the bonds. Seema Srivastava, Senior Research Analyst at SMC Global Securities, noted that while the immediate market reaction has been positive because earlier US legal developments had triggered sharp moves in Adani shares, investors should avoid treating the court order as a standalone buy signal. According to Business Standard, for a long-term investor, the US court development should be viewed as a reduction in event risk rather than the entire investment thesis.
