US court rejects intervention by Indian origin man alleging ‘deep state’ plot in SEC case against Adani

A United States court recently rejected an application by a New Jersey resident to intervene in the Securities and Exchange Commission’s (SEC) case against Gautam Adani and Sagar Adani over an alleged bribery scheme.[Securities and Exchange Commission v Gautam Adani and Sagar Adani].

In an order passed on July 15, Judge Nicholas G Garaufis of the United States District Court for the Eastern District of New York dismissed the plea filed by Ashu Shukla who alleged that “US deep state actors” were pursuing a “malicious agenda”.

The Court held that Ashu Shukla, who appeared without a lawyer, had failed to demonstrate any legally recognisable interest in the proceedings

“Additionally, Shukla’s allegations are not credible because they are conclusory and speculative,” the Court said.

Shukla had claimed that the proposed settlement between the SEC and the Adanis would affect global investors, businesses, peace initiatives and the wider public interest.

He alleged that the case was part of a coordinated effort involving persons in the United States and Indian government officials to extract bribes from Adani. He also sought to blame “US deep state actors” for the case.

The application questioned the selection of officials in the SEC and the United States Department of Justice, the engagement of Robert J Giuffra Jr as Gautam Adani’s lawyer and the attempt to settle the matter.

The Court found that these allegations did not credibly implicate any personal legal interest held by Shukla.

Instead, they concerned a “nebulous public interest” and the interests of other persons, including Adani himself.

It also noted that Shukla’s six supporting exhibits largely comprised his own social media posts and, “confusingly”, a proposed peace plan for the conflict in Gaza.

The Court said Shukla had neither identified the public interest that could be impaired by the proposed settlement nor produced credible evidence of coordination between persons in the United States and Indian officials.

Shukla had also failed to identify the alleged Indian actors or explain the purported malicious agenda with any specificity, the Court observed.

The Court rejected both intervention as of right and permissive intervention under Rule 24 of the Federal Rules of Civil Procedure.

“The court does not believe that the proposed intervention will contribute to the development of the underlying factual issues and to the just and equitable adjudication of the legal questions presented. If anything, it would do the opposite,” the order stated.

The Court registry was also directed to reject any further filings by Shukla in the case.

By way of background, the indictment by the US government had alleged that Gautam Adani, Sagar Adani, Vneet Jaain, Ranjit Gupta and others devised a plan to bribe Indian state government officials to get a 12 gigawatt solar power project going. It was alleged that bribes worth ₹2,029 crore (around $265 million) were promised to officials of state electricity distribution companies. Of this, ₹1,750 crore was allegedly allocated to officials in Andhra Pradesh to secure purchase of 7 gigawatts of solar power.

The United States DOJ later sought to drop the indictment and moved the Court seeking dismissal of the indictment against all eight accused.

However, judge Garaufis, on June 25, refused to immediately allow the request by the DOJ to drop the charges and instead asked it to give reasons for its decision to seek dismissal of the indictment.

The DOJ then filed a response on July 4 in which it described the prosecution against Adani as a “name and shame” indictment unsealed during the final days of the Biden administration without any realistic prospect of a trial.

It argued that the case was overwhelmingly foreign in character, since it concerned Indian nationals allegedly offering bribes to other Indian nationals for Indian electricity contract.

In his July 8 order, Judge Garaufis said that while considering a motion under Rule 48(a) of the Federal Rules of Criminal Procedure, a court must satisfy itself that the reasons advanced by the government are substantial and represent the real grounds for seeking dismissal.

Since the Court did not find that any undisclosed agreement existed, it sought Adani’s affidavit to satisfy itself on this aspect before deciding the government’s application to dismiss the indictment.