New Delhi, India — India’s Adani Group on Thursday called US charges that their billionaire tycoon founder Gautam Adani had paid more than $250 million in bribes “baseless”, as the opposition leader demanded his arrest.
The stiff denial came after shares in the industrialist’s conglomerate nosedived more than 23 percent in Mumbai, the morning after a bombshell indictment in New York accused him of deliberately misleading international investors.
Adani, once the world’s second-richest man, is a close ally of Hindu nationalist Prime Minister Narendra Modi and critics have long accused him of improperly benefitting from their relationship.
“The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied,” the conglomerate said in a statement.
“All possible legal recourse will be sought,” it added.
But Congress party leader Rahul Gandhi said the businessmen should be taken into custody.
“We demand that Adani be immediately arrested. But we know that won’t happen as Modi is protecting him,” Gandhi told reporters in New Delhi.
“Modi can’t act even if he wants to, because he is controlled by Adani.”
Wednesday’s indictment accuses Adani and multiple subordinates of paying huge sums of more than $250 million in bribes to Indian officials for lucrative solar energy supply contracts.
The deals were projected to generate more than $2 billion in profits after tax over roughly 20 years.
None of the multiple defendants named in the case are in custody.
‘Lied’ –
Adani and two other board members of his Adani Group “lied about the bribery scheme as they sought to raise capital from US and international investors”, US attorney Breon Peace said in a statement.
Shares in Adani Enterprises, the conglomerate’s main listed unit, plunged 23.4 percent on the Mumbai bourse during a day of frenzied sell-offs that triggered multiple trading halts.
The conglomerate’s renewable energy subsidiary, Adani Green Energy, said it had decided to halt a planned bond sale “in light of these developments”.
Gautam’s nephew and board member Sagar Adani, who is also named in the indictment, told AFP in October that there was “no political connection” between Adani Group and the Modi government.
“All the projects we got have not been granted by any concession but through an independent and transparent auction system,” he said.
Modi’s government has yet to comment on the charges but a spokesman for his ruling Bharatiya Janata Party (BJP), Amit Malviya, said the indictment appeared to implicate opposition parties rather than his own.
“Don’t get needlessly excited,” Malviya wrote on X.
‘Fear of reprisal’ –
With a business empire spanning coal, airports, cement and media, the Adani Group has weathered previous corporate fraud allegations and suffered a similar stock crash last year.
The conglomerate saw $150 billion wiped from its market value in 2023 after a shock report by short-seller Hindenburg Research accused it of “brazen” corporate fraud.
It claimed Adani Group had engaged in a “stock manipulation and accounting fraud scheme over the course of decades”.
The report also said a pattern of “government leniency towards the group”, stretching back decades, had left investors, journalists, citizens and politicians unwilling to challenge its conduct “for fear of reprisal”.
Gautam Adani denied Hindenburg’s allegations and called its report a “deliberate attempt” to damage its image for the benefit of short-sellers.
He saw his net worth shrink by around $60 billion in the two weeks following the release of the report and he is currently ranked by Forbes as the world’s 25th-richest person.
‘Abject failure’ –
Adani Group’s rapid expansion into capital-intensive businesses has also raised alarms in the past, with Fitch subsidiary and market researcher CreditSights warning in 2022 that it was “deeply over-leveraged”.
Jairam Ramesh, a spokesman for Gandhi’s Congress party, said Thursday that the indictment “vindicates” their demand for a parliamentary inquiry into Adani.
Ramesh condemned what he called the “abject failure” of the Securities and Exchange Board of India (SEBI) to hold the Adani Group “to account for the source of its investments”.
Adani, born to a middle-class family in Ahmedabad, Gujarat state, dropped out of school at 16 and moved to the financial capital Mumbai to find work in the city’s lucrative gem trade.
After a short stint in his brother’s plastics business, he launched the flagship family conglomerate that bears his name in 1988 by branching out into the export trade.
Kenya scraps airport, power deals with Adani Group
Kenyan President William Ruto on Thursday scrapped controversial deals with India’s embattled Adani Group over Nairobi’s Jomo Kenyatta International Airport (JKIA) and a state-owned electricity service.
During his annual state of the nation address, Ruto said he had directed the relevant agencies to “immediately cancel the ongoing procurement process for the JKIA Expansion Public Private Partnership transaction, as well as the recently concluded KETRACO transmission line”.
Ruto — to loud cheers from MPs — said “in the face of undisputed evidence or credible information on corruption, I will not hesitate to take decisive action.”
Airport workers went on strike in September over the proposed $1.85-billion investment deal that would have seen the Indian firm lease the airport, among Africa’s busiest, for 30 years.
Ruto also pulled the plug on Adani’s bid for state-owned KETRACO, a proposed $736 million deal that would have seen the Indian firm develop and operate transmission lines across the East African country.
Ruto said that his government would “immediately commence the process of onboarding alternative partners”.
Adani Group’s Middle East ventures
In August this year, Adani Power Limited incorporated a wholly-owned subsidiary, Adani Power Middle East Ltd. in Abu Dhabi, UAE, to invest in power, infrastructure, and related fields. The authorized capital of Adani Power Middle East is $27,000 shares of $1 each.
Last month, media reports said the Group was in advanced discussions with an unnamed sovereign wealth fund from the Middle East to raise up to $1 billion for its airports business.
In July, the Abu Dhabi Investment Authority and Qatar Investment Authority invested in Adani Energy Solutions’ qualified institutional placement, which raised up to $1 billion.
In December 2023, Adani Energy Solutions formed a joint venture with Abu Dhabi’s Esyasoft Holdings to expand its smart meter business in India and globally.
Abu Dhabi conglomerate International Holding Company (IHC) invested $2 billion in three Adani Group firms, Adani Green Energy, Adani Energy Solutions, and Adani Enterprises in 2022.
IHC invested $400 million in Adani Enterprises’ public offer, which Gautam Adani later called off following the Hindenburg report In January 2023.