Adani bribery scandal: In which countries is the business at stake

#News Bureau November 2024

The Adani Group is under investigation in the US after Indian businessman Gautam Adani and seven associates were accused of paying a bribe of $265 million (Rs 2,029 crore) to Indian government officials. The FBI, America’s largest investigating agency, has informed the US Federal Court about all the facts against Adani. Due to the allegations made public last week, many countries are having to reconsider or cancel deals with the Adani Group.

The Adani Group has denied the allegations and called them ‘baseless’. It said that it will seek legal help. It is important to mention here that the Adani Group’s global deals took place very fast. The FBI started an investigation against the Adani Group a year ago.

Adani’s Global Projects
The Adani Group’s global projects have resulted in a wide international portfolio and include projects in Asia, Africa and Australia.

Israel: The Adani Group owns a 70% stake in Haifa Port, which contributes 3% of the country’s annual cargo volume. Israel’s Prime Minister Benjamin Netanyahu himself is facing corruption charges. Israel has also signed an agreement with Adani Defense. Israel has not said anything yet, but all the agreements during Netanyahu’s time may be investigated if he steps down. Indian PM Narendra Modi has been calling Netanyahu his friend.

Australia: The Adani Group is embroiled in controversies over the Carmichael coal mine. There have also been protests there. Operational challenges are being faced, including allegations of racism at the workplace and limited production capacity.

Tanzania: The $39.5 million partnership aims to modernize East African ports. Tanzania has not yet issued any statement after Kenya’s announcement.

Vietnam: Adani Group has promised $3 billion for airports and renewable energy projects. Vietnam has also not responded to the Adani bribery scandal.

Kenya’s initiative

As soon as the matter became public in the US, Kenya was the first to take swift action to cancel two projects with the Adani Group. According to a Reuters report, President William Ruto said on Thursday that a purchase process under which control of the country’s main airport was to be handed over to the Adani Group has been canceled. It is important to mention here that the Adani Group first took over the operation of all the airports in India. The Modi government handed over the operation of all the airports to the Adani Group one by one. Yes, the entire government process was followed for this. But Adani has now become a monopoly group in the airport business.

“I have instructed agencies within the Ministry of Transport and the Ministry of Energy and Petroleum to immediately cancel the ongoing procurement,” Ruto said in his State of the Nation address to parliament. He attributed the decision to “new information provided by US investigative agencies and partner countries”.

In Kenya, the Adani Group was not going to get only airport operations. In addition, a 30-year, $736 million public-private partnership agreement with the Ministry of Energy for the construction of power transmission lines was canceled. Both cancellations are directly related to the bribery allegations against the Adani Group. That is, contracts were allegedly obtained by paying bribes in Kenya too. The opposition parties there had raised this issue.

Adani Energy Solutions on Saturday said it does not need to make any disclosure under Indian stock exchange rules about the cancellation of its $736 million transmission line project by Kenya as it is in the normal course of its business.

Adani Energy Solutions on Saturday said it does not need to make any disclosure under Indian stock exchange rules about the cancellation of its $736 million transmission line project by Kenya as it is in the normal course of its business.

France’s TotalEnergies backs out
France’s largest power company TotalEnergies, which has a 20% stake in Adani Green Energy Ltd (AGEL), has halted any new funding or investment in any Adani-related business. “Until the allegations against Adani Group individuals and their consequences are cleared, TotalEnergies will not make any new funding as part of its investments in Adani Group companies,” the company said.

However, Adani Green Energy Ltd (AGEL) rejected TotalEnergies’ claims that TotalEnergies’ decision would impact its growth plans, and said no financial transaction was being discussed with the French company.

Investigation in Sri Lanka: The US International Development Finance Corporation (DFC), which had pledged $553 million for the Adani-backed port terminal project in Colombo, has begun further investigations following the recent allegations. This means that this deal may also be put on hold. After the Adani bribery case came to light, Bloomberg reported – A DFC official confirmed that no money has been given to the Adani Group yet and the loan agreement has not reached financial closure. This means that before DFC could give money to Adani, it has stopped the deal after the matter came to light.

Sri Lanka is reviewing planned wind power projects linked to the Adani Group, according to media reports. The government is assessing the financial position and environmental impact of the proposals, with cabinet discussions expected in the coming weeks.

All deals reviewed in Bangladesh
Bangladesh’s interim government has set up a review committee to investigate energy agreements made under the previous regime, including the deal involving Adani Power’s Godda coal-based plant, reports news agency Reuters. The committee has recommended involving a legal and investigative agency to investigate these agreements, citing concerns about their terms and long-term status.

Trouble in India too

In India, Andhra Pradesh is reconsidering its power supply contract with the Adani Group. According to a Reuters report, officials are reviewing documents to determine whether the state can cancel its agreements with the group. The Congress government of Telangana has returned a donation of Rs 100 crore received from the Adani Foundation. The business agreements that were made with the Adani Group in Telangana are being considered. The Adani Group company has got a huge project to develop the Dharavi slum area in Mumbai. In which valuable land has also come to the Adani Group. But to complete this project, the Adani Group will have to raise money from the market. Is Adani’s credibility now such that investors and his companies will give money?