Charges should never have been brought: DOJ defends dismissal of Adani case
Washington, July 4
The US Department of Justice on Saturday vigorously defended its decision to drop criminal charges against Indian billionaire Gautam Adani and seven co-defendants, arguing the case should never have been brought and that prosecutors alone have the constitutional authority to decide when a prosecution should end.
In a detailed filing submitted to the US District Court for the Eastern District of New York, Principal Associate Deputy Attorney General R Trent McCotter responded to a June 26 court order directing the department to explain why it was seeking dismissal with prejudice of all charges in the case.
The filing argues that Justice Department motions to dismiss criminal charges are intentionally brief because requiring prosecutors to disclose their reasoning could expose privileged internal deliberations, discourage future dismissals and interfere with the Executive Branch's constitutional authority over prosecutorial decisions.
McCotter nevertheless said he was granting "a limited waiver" of privilege to explain the department's reasoning after the court sought additional details.
According to the filing, the department concluded after months of review that the prosecution suffered from multiple legal, jurisdictional and practical flaws.
Among the principal reasons cited was that the alleged conduct occurred overwhelmingly in India.
"This is a foreign case," the filing states, adding that "India can better manage its internal systems than can prosecutors in Brooklyn and Washington."
The Justice Department also noted that Indian authorities had investigated many of the allegations and, through reports and decisions issued in 2026, "has found no actionable misconduct."
The filing further argued that investors had suffered no financial losses because two of the debt offerings had already been repaid in full, while the remaining notes continued to be serviced without any indication of default. It also said key witnesses and significant evidence were located in India, creating substantial evidentiary challenges for any prosecution in the United States.
The department also pointed out that none of the defendants had appeared before the US court and were unlikely to do so because they are foreign nationals residing outside the United States.
Addressing the securities fraud counts against Gautam Adani, Sagar Adani and another defendant, the filing contends that those charges "should never have been brought."
It argues that the alleged conduct occurred almost entirely outside the United States and raised significant jurisdictional questions under US securities laws. The department also maintained that many of the statements cited by prosecutors were general corporate assertions about integrity and compliance that courts have previously treated as non-actionable corporate "puffery."
The filing further said the institutional investors involved were among the most sophisticated financial entities in the world and, in any event, had not suffered losses because the securities continued to perform.
On the Foreign Corrupt Practices Act charges against the remaining defendants, the Justice Department said the prosecution failed to satisfy current departmental guidelines, which prioritise cases involving US national interests, organised crime, national security or significant harm to US businesses.
According to the filing, the alleged conduct "did not involve criminal organisations, did not have any effect on US companies, did not in any way implicate national security, was not egregious, and has been the subject of investigations in India."
The department also rejected media reports suggesting its decision was influenced by potential investments by Adani companies in the United States.
"The current or former Department attorneys who unethically fed those stories have suggested that I sought dismissal of the securities charges at least in part because of some promise by those defendants to invest money in the United States. That is false," the filing states.
— IANS
Reader Comments
Interesting how the DOJ mentions "puffery" and "sophisticated investors" - that's a strong legal argument. But I still feel uneasy about large business groups operating without proper accountability. We need stronger oversight in India too, especially for infrastructure projects.
As an international business observer, this seems like a fair call. The FCPA charges being dropped because they don't meet current guidelines makes sense. But I'm curious why the DOJ took so long to reach this conclusion if the flaws were so obvious from the start.
The DOJ's point about "India can better manage its internal systems" resonates with me. Our institutions should handle such cases. However, this shouldn't be seen as a free pass for any company. We need transparent investigations here in India to maintain public trust.
I'm surprised the DOJ is so explicitly saying the charges "should never have been brought." That's unusual language. But if the evidence is weak and the investors haven't lost money, maybe this is the right outcome. Still, the process must be transparent to maintain credibility.
Very interesting development! The DOJ explicitly denying investment-linked motives is smart legal strategy. But more importantly, this validates that India's legal system should handle matters with Indian dimensions. Our courts are robust enough for such cases. Let's focus on strengthening domestic accountability mechanisms.
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