New York [US], April 8 : The U.S. District Court for the Eastern District of New York has accepted a plea filed by the counsels for Guatam and Sagar Adani for a pre-motion conference to dismiss the case.
In an order the court said that it had received the defendants' letter requesting a pre-motion conference on their anticipated motion to dismiss the complaint. The court said that it granted that request and directed the parties to confer and to contact the court's deputy to schedule the pre-motion conference.
Earlier on Tuesday, the counsels for Gautam and Sagar Adani informed that they intend to seek to dismiss the US SEC's complaint by April 30 and, as part of this process, have submitted a letter with the East District New York (EDNY) judge informing the Court that the Defendants are prepared to attend a pre-motion conference should the Court wish to schedule one.
In the letter, the Defendants briefly set out their grounds for dismissal of SEC's complaint, including that the court concerned lacks personal jurisdiction over the Defendants and the claims against them, the SEC's claims are impermissibly extraterritorial, the alleged misstatements by the Defendants are too vague and general for any reasonable investor to rely upon as a guarantee of any concrete fact or outcome, making them in-actionable, and the Defendants' lack of involvement in the transaction bars the SEC's claims against them.
Gautam Adani is represented by Sullivan & Cromwell LLP, while Sagar Adani's counsel is Nixon Peabody LLP and Hecker Fink LLP.
According to the counsels, in September 2021, AGEL conducted a USD 750 million bond offering pursuant to SEC Rule 144A and SEC Regulation S, which are registration exemptions for private resales to qualified institutional buyers (QIBs) and non-US sales. AGEL sold these bonds outside the US through an agreement to non-US underwriters, who then resold the Notes to QIBs. A fraction of those resales is alleged to have been made to "investors in the United States". AGEL was not a party to these transactions, the lawyers said in the letter to the court.
The defendants say that the grounds for dismissal also include the SEC's failure to state a claim on the basis that the defendants are neither based in the US nor conduct activities there that would grant the court jurisdiction and the alleged actions involve non-US entities outside the scope of US law.
The defendants also say that even if the claims are accepted at face value, the complaint fails to establish any actionable legal violation or meet the threshold required to proceed.
The US SEC had alleged that Gautam Adani, Sagar Adani and others orchestrated a USD 250 million-plus bribery scheme between 2020 and 2024 to secure solar energy contracts in India.
The defendants say that the Court lacks personal jurisdiction over defendants and the claims against them should be dismissed under Rule 12(b)(2). The claims according to the lawyers "involve Indian Defendants, an Indian issuer, securities not registered with the SEC and not traded on U.S. exchanges, and underlying conduct alleged to have occurred exclusively in India."
The counsels said, the SEC has not alleged underwriters who purchased the bonds from AGEL were US institutions as they were not, or that the Subscription Agreement underlying the purchases was governed by US law as it wasn't."
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor