A man walks past a corporate office of Adani Group in Gurugram, India, November 22, 2024. REUTERS/Priyanshu Singh
| Photo Credit: PRIYANSHU SINGH
(This article is part of the View From India newsletter curated by The Hindu’s foreign affairs experts. To get the newsletter in your inbox every Monday, subscribe here.)
If US investment research firm Hindenburg’s 2023 findings cast considerable doubt over billionaire businessman Gautam Adani’s business operations — calling it “the largest con in corporate history — the criminal indictment issued by the U.S. Department of Justice last week was even more damning. The charges include promising over $250 million in bribes to Indian government officials to secure solar energy contracts, conspiracies to commit securities and wire fraud, and orchestrating “a multi-billion-dollar scheme” to defraud U.S. investors and global financial institutions by giving “false and misleading statements”. Further, the indictment makes serious allegations regarding the processes followed by senior executives of Adani Green Energy Ltd. and Azure Power Global Ltd. (a renewable energy company headquartered in New Delhi, which used to be listed on the New York stock exchange) to bribe Indian government officials and secure lucrative solar power contracts. It details how the alleged bribery scheme was systematically piloted over time and across jurisdictions using ‘Bribery Notes’, code words, in-person meetings, PowerPoint slides, and Excel analyses of different payment options. G. Sampath breaks down the implications of the indictment in this analysis.
The ramifications of the indictment go beyond the Group’s business interests and threaten India’s standing globally, observers noted. “Adani scandal will rock Indian market’s coming of age,” the Financial Times said. “The Adani scandal takes the shine off Modi’s electoral success”, the Economist reported.
Predictably, the Adani Group has denied the allegations and termed them “baseless”, as big businesses often do in the wake of serious corruption charges. Regardless, the development impacted the Indian stock markets instantly. They slipped back into the red on Thursday, with the BSE Sensex sliding 0.54% to 77,155.79 points and the broader Nifty-50 hitting a fresh five-month low. Our colleague Ashokamithran T., who covers economy and business, tracked how six group stocks, including those of flagship Adani Enterprises Ltd. (AEL), recorded a mild recovery but its energy businesses sank further into the red, a day after the Adani Group faced its worst market hammering since Hindenburg Research’s allegations in early 2023.
The US indictment triggered swift reactions globally, given that the Indian conglomerate’s footprint goes beyond the country, across the region and beyond. Kenya took a bold step, instantly cancelling a multimillion-dollar airport expansion and energy deals with the Adani Group. President William Ruto in a State of the nation address said the decision was made “based on new information provided by our investigative agencies and partner nations”.
Greater scrutiny can be expected in the region too, where Adani projects worth millions of dollars are already mired in controversary and legal battles. Kallol Bhattacherjee spoke to energy experts in Bangladesh, who said the indictment may become a factor in future negotiations between the Adani Group and the interim government in Bangladesh.
Business analysts in Sri Lanka told us that Sri Lanka should be vigilant about the Adani power project in the island nation, pointing to “ambiguity” in whether the deal was a “government-to-government” arrangement, or a private sector investment.
We compiled a timeline of allegations facing the Adani Group, both domestically and internationally, for our readers to appreciate the many concerns around the powerful business.
The Hindu take: In an editorial titled ‘Shielding Adani’, the newspaper noted that “It will be a matter of everlasting shame if there is no domestic investigation by Indian agencies into allegations by the U.S. Department of Justice that billionaire businessman Gautam Adani and his associates offered bribes to officials in more than one State.”
The BJP has been putting up a stout defence of the group as though its political interests are inseparable from Mr. Adani’s corporate interests, it contended. “The fortunes of Mr. Adani, counted as one of the world’s richest, may now see a steep spiral, as not only have shares of his companies crashed but also countries that have entered investments from his conglomerate may turn their backs on him. However, this is not an issue about one tycoon suffering a setback due to developments beyond the control of his political patrons. It is about how far a government can be seen as shielding an individual,” the Editorial noted.
Top 5 stories we are reading this week:
1. Suhasini Haidar’s exclusive interview with Chief Advisor of the Bangladesh Interim Government Muhammad Yunus
2. A profile of Sri Lanka’s Janatha Vimukthi Peramuna: From underground to government
3. An overturning of Sri Lanka’s old political order by Ahilan Kadirgamar
4. Joan Sony Cherian profiles Tulai Gabbard, “the outsider”
5. A thousand days of Ukrainian resilience by Oleksandr Polishchuk, the Ukrainian Ambassador in India
Published – November 25, 2024 02:33 pm IST
