The US Department of Justice (DOJ) has defended its decision to drop all criminal charges against Indian billionaire Gautam Adani and his nephew, Sagar Adani, telling a federal court that investors suffered no financial losses and that the case was weakened by significant legal, jurisdictional and evidentiary shortcomings.
In a detailed submission before the US District Court for the Eastern District of New York, the DOJ said, "Not a single penny has ever been lost on the securities at issue," arguing that the absence of investor losses undermined the basis for criminal prosecution. The department noted that two of the four debt offerings central to the case have already been fully repaid, while the remaining two continue to be serviced on time, with no indications of default or financial distress.
The DOJ further argued that the alleged victims were not retail investors but some of the world's largest and most sophisticated financial institutions. According to the filing, the securities were initially sold to foreign-owned underwriters before reaching qualified institutional buyers in the United States, making it difficult to prove that such experienced investors had been misled by what it described as broad corporate compliance statements or non-actionable "puffery".
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The department maintained that, even if prosecutors had established that investors were misled, there were no financial losses to recover because the securities had either been repaid or continued to perform as expected. Consequently, it argued that no restitution could be be awarded in the criminal case.
The DOJ also questioned the legal basis of the prosecution, contending that the alleged misconduct occurred almost entirely in India and involved Indian public officials, raising jurisdictional concerns over pursuing the case in the United States. It argued that the allegations, at most, were more appropriately addressed through civil proceedings rather than criminal charges, noting that a parallel civil case had already been settled earlier this year.
Criticising the previous administration's handling of the matter, the DOJ described the indictment as a "name and shame" exercise pursued with little realistic prospect of a trial. The department said its decision to seek dismissal of the charges was "not a close call", maintaining that the case should not have been brought in the first place.
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