Indian opposition leader demands arrest of businessman Adani after US accusations

Billionaire Indian businessman Gautam Adani should be arrested after US prosecutors accused him of paying more than $250 million in bribes to secure lucrative government contracts, opposition leader Rahul Gandhi said on Thursday.

Gandhi’s demand came after shares of the industrialist’s conglomerate fell nearly 20 percent in Mumbai the morning after a bombshell indictment in New York accusing him of deliberately misleading international investors.

Adani is a close ally of Hindu nationalist Prime Minister Narendra Modi and at one point the world’s second-richest man, and critics have long accused him of taking improper advantage of his relationships.

“We demand Adani’s immediate arrest. But we know this will not happen as Modi is protecting him,” Gandhi told reporters in New Delhi.

“Even if Modi wanted to, he cannot move because he is controlled by Adani.”

Wednesday’s indictment accuses Adani and several of his subordinates of paying more than $250 million in bribes to Indian officials for lucrative solar energy supply contracts.

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The deals were expected to generate after-tax profits of more than $2 billion over about 20 years.

None of the many defendants named in the case are in custody.

‘Lied were told’

US attorney Breon Peace said in a statement that Adani and two other board members of the Adani Group “lied about the bribery scheme while trying to raise capital from US and international investors.”

The indictment led to huge losses at flagship-listed unit Adani Enterprises and several other subsidiaries soon after the Mumbai stock exchange reopened on Thursday.

The group’s renewable energy subsidiary acknowledged the charges against the businessman and two other Adani Group board members in a brief statement.

Adani Green Energy said it had decided to halt the planned bond sale “in light of these developments” but did not comment further on the allegations.

Sagar Adani, his nephew and board member named in the indictment, told AFP in October that there was “no political connection” between the Adani Group and the Modi government.

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“We’re basically adjusting to what the government really needs in their best interest,” he added.

“All the projects we received were awarded through an independent and transparent auction system, not with any concessions.”

The Modi government is yet to comment on the accusations, but ruling Bharatiya Janata Party (BJP) spokesman Amit Malviya said the indictment blamed opposition parties rather than his own party.

“Don’t get unnecessarily excited,” Malviya added in a post on social media platform X.

‘Fear of retaliation’

Adani Group, which has a business empire spanning coal, airports, cement and media, has weathered previous allegations of corporate fraud and suffered a similar stock crash last year.

The conglomerate has $150 billion wiped from its market value in 2023 after a shock report by short-seller Hindenburg Research accused it of “brazen” corporate fraud.

He alleged that Adani Group was involved in a “decades-long scheme of stock manipulation and accounting fraud.”

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The report also highlights that the decades-old model of “government tolerance towards the group” is affecting investors, journalists, citizens and politicians she does not want to challenge his behavior “for fear of retaliation.”

Gautam Adani, founder of the family-run conglomerate, rejected Hindenburg’s original allegations and called his report a “deliberate attempt” to damage its image for the benefit of short sellers.

He saw his net worth drop by nearly $60 billion in the two weeks after the report was published, and he is now ranked as the 25th richest person in the world by Forbes.

‘Disgusting failure’

Adani Group’s rapid expansion into capital-intensive businesses has raised alarms in the past; Fitch subsidiary and market researcher CreditSights had warned in 2022 that the group was “highly overleveraged”.

Jairam Ramesh, spokesman for Gandhi’s Congress party, said on Thursday that the indictment “validates” the demand for a parliamentary inquiry into Adani.

Ramesh condemned the “egregious failure” of the Securities and Exchange Board of India (SEBI) to hold Adani Group “accountable for the source of its investments”.

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Born into a middle-class family in Ahmedabad in the state of Gujarat, Adani left school at 16 and moved to the financial capital Mumbai to find work in the city’s lucrative jewelery trade.

After working briefly in his brother’s plastics business, he turned to export trading in 1988, establishing the flagship family holding company that bears his name.

Source: AFP