US court permanently dismisses fraud case against Gautam Adani, nephew Sagar

A US court has dismissed with prejudice the criminal charges against Adani Group chairman Gautam Adani and his nephew, bringing to an end nearly two years of proceedings in an alleged fraud and bribery case.

The US District Court for the Eastern District of New York granted the Justice Department's Rule 48(a) motion to dismiss the indictment against Gautam Adani, Sagar Adani and former Adani Green CEO Vneet Jaain. The counts covered securities-fraud conspiracy, wire-fraud conspiracy and securities fraud.

Judge Nicholas Garaufis allowed the Justice Department's motion after seeking additional explanations from prosecutors over their decision to abandon the case. A dismissal with prejudice permanently closes the criminal proceedings and bars the charges from being refiled, but does not amount to a judicial finding on the underlying allegations.

The criminal case originated in November 2024, when US prosecutors alleged that Gautam Adani, Sagar Adani, former AGEL chief executive Vneet Jaain and others were involved in a conspiracy to pay USD 250 million in bribes to Indian government officials to secure solar power contracts projected to generate more than USD 2 billion in after-tax profits over two decades. Prosecutors also alleged that investors were misled while the group raised more than USD 3 billion through loans and bond issuances in US markets.

The Adani Group consistently denied the criminal allegations, describing them as baseless and maintaining that it had acted in accordance with applicable laws and regulatory requirements.

The SEC's separate civil action has also been resolved through a final judgment against Gautam Adani, under which he consented to the order without admitting the allegations. The judgment also requires Adani to pay a USD 6 million civil penalty to the SEC within 30 days.

In its submissions before the court, the Trump administration said continuing the prosecution no longer served the interests of justice, citing significant jurisdictional and evidentiary challenges, the predominantly Indian nature of the alleged conduct, the fact that Indian authorities had examined the matter, the absence of identified investor losses and broader public-interest considerations. The DoJ also stated that the indictment, unsealed in November 2024 during the closing weeks of the previous Biden administration, had little realistic prospect of proceeding to trial and appeared to be a politically motivated "name and shame" exercise orchestrated by the outgoing administration.

In dismissing the charges, Garaufis said he was satisfied that Adani's November 2024 promise to invest USD 10 billion in the United States did not factor into the Justice Department's decision, and acknowledged that judges' role in reviewing federal prosecutors' decisions to drop charges was limited.

Adani welcomed the 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," he said in a post on X.

Before approving the request, Garaufis had directed the DoJ to publicly explain its reasons for seeking dismissal, and required the defendants to file sworn declarations confirming there had been no promise, offer, quid pro quo or undisclosed agreement connected with the decision. In his declaration, Gautam Adani categorically denied the existence of any such arrangement. After reviewing the government's submissions and the sworn declarations, the court accepted the motion and permanently dismissed the case.

The dismissal means the criminal proceedings concluded before trial. No witnesses were examined, no evidence was tested in court, and no judicial findings were made on the underlying criminal allegations.

The proceedings unfolded against the backdrop of heightened global scrutiny of the Adani Group following allegations made by now-shuttered short seller Hindenburg Research in January 2023. The report triggered a sharp sell-off in Adani Group stocks, erasing more than USD 150 billion in market value at its lowest point. The group has consistently rejected those allegations and maintained that it complied with all applicable laws and disclosure requirements.

The court found that the DoJ had met the legal requirements for dismissal on one ground: its argument that alleged statements about Adani Green's anti-bribery policies and corporate compliance could amount to "inactionable puffery" — broad statements investors could not reasonably rely on creating legal risks for the prosecution.

The judge rejected or found insufficient several other reasons advanced by the government, including the argument that the alleged misconduct occurred almost entirely in India and therefore presented significant US securities-law jurisdictional risks. The court noted the indictment itself alleged that investors committed funds in the United States and that the transactions involved the US financial system. The court also found the government's argument concerning the absence of sophisticated-investor deception did not provide sufficient support, while noting it did not need to reach that issue since the puffery rationale was sufficient to dismiss the three counts.

The dismissal was with prejudice, meaning the three charges cannot be brought again. The court said there was no concern about prosecutorial harassment, as the government had requested dismissal with prejudice and the defendants had consented to it.