Kenyan President William Ruto announced on Thursday, November 21, that he had ordered the cancellation of a procurement process expected to award control of the country's main airport to the Adani Group after chairman Gautam Adani was indicted in the US over alleged bribery and fraud charges.
Under the proposed deal worth nearly $2 billion, the Adani Group was to add a second runway at the Jomo Kenyatta International Airport and upgrade the passenger terminal in exchange for a 30-year lease. Ruto said he also cancelled a 30-year, $736-million public-private partnership Adani signed with the energy ministry last month to construct power transmission lines.
Also Read: Gautam Adani’s net worth drops by over ₹88,726 crore in one day after US bribery indictment scandal
"I have directed agencies within the Ministry of Transport and within the Ministry of Energy and Petroleum to cancel the ongoing procurement immediately," Ruto said in his State of the Nation address, attributing the decision to "new information provided by investigative agencies and partner nations".
According to reports, in October, Adani Energy Solutions signed a 30-year, $736 million public-private partnership deal with the Kenya Electrical Transmission Company. A court suspended the contract in the same month.
Kenya's energy minister said there was no bribery or corruption in awarding a contract to the Adani Group to build power lines in the country. Energy Minister Opiyo Wandayi said the deal was above board. "There has been no case of corruption or bribery as far as PIP (Privately-initiated proposal) with Adani Energy Solutions is concerned," he told Kenya's Senate committee on finance.
Also Read: Adani Green Energy Q2 Results: Net Profit jumps 39% to ₹515 crore, total income up over 30%
Wandayi said Kenya's Public-Private Partnership Act required a review and verification of documents provided by Adani Energy Solutions showing its compliance with laws and taxes in its country of origin, India. “We had no knowledge of any other adverse matters ... and therefore, we are proceeding based on the outcome of the very rigorous due diligence exercise undertaken by the contracting authority in line with the law.”
Gautam Adani was allegedly indicted in New York, US, over his role in a multibillion-dollar bribery and fraud scheme. According to US authorities, 62-year-old Gautam Adani, founder and chairman of the ports-to-power conglomerate, and seven other defendants agreed to pay Indian government officials over $250 million in bribes to obtain solar contracts.
The contracts were expected to yield $2 billion in profit over 20 years and to develop India's largest solar power plant project. Gautam Adani and his nephew Sagar are accused of orchestrating the scheme to ensure the solar energy project and misleading investors during a $750 million bond offering, which raised about $175 million from US investors.
"Gautam and Sagar Adani were engaged in the bribery scheme during a September 2021 offering by Adani Green that raised $750 million, including approximately $175 million from US investors. The Adani Green offering materials included statements about its anti-corruption and anti-bribery efforts that were materially false or misleading," said the US Securities and Exchange Commission (SEC).
In the indictment unsealed by federal prosecutors in New York, Adani was charged with securities fraud, conspiracy to commit securities fraud, and wire fraud. One result of the US legal action is that the Adani group decided not to proceed with a proposed US dollar-denominated bond offering. The US Department of Justice said, “The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.”
Also Read: Gautam Adani ‘bribery’ case: How the troubles began since Hindenburg allegations — a timeline
US authorities said the Adanis and Adani Green Energy's former CEO, Vneet Jaain, had raised more than $3 billion in loans and bonds by hiding their corruption from lenders and investors. US law bars foreign companies from raising money from US investors by paying bribes overseas to win business.
According to prosecutors, Adani Green Energy raised money from US investors and submitted financial documents falsely stating that it had not paid any government officials to secure an improper advantage.
US court records show that arrest warrants have been issued in the United States for Gautam and Sagar Adani, and US prosecutors plan to hand those warrants to foreign law enforcement. The defendants were charged with securities fraud, securities fraud, and wire fraud and were also charged in the SEC civil case.
Adani Group denied the allegations and said it would seek "all possible legal recourse. "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 an official statement.
"The Adani Group has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations. We assure our stakeholders, partners and employees that we are a law-abiding organisation, fully compliant with all laws," it added.
Gautam Adani's net worth plunged by over $10.5 billion, or nearly ₹88,726 crore, on Thursday after the indictment charges were made public. According to the Forbes Real-Time Billionaire Index, Adani, India's second-richest man, now commands a net worth of $59.3 billion. During today's session, the bribery scandal triggered a rout in the Adani Group stocks.
Several Adani Group shares, including those of the flagship firm Adani Enterprises, suffered massive losses and hit their lower circuits in early trade. The top loser among the group stocks was Adani Enterprises, which closed at ₹2,182.55, down 22.61 per cent. The sharp selloff wiped out over ₹2 lakh crore from the Adani Group's overall market capitalisation (m-cap). The group's total m-cap declined to ₹12.1 lakh crore from ₹14.31 lakh crore in the previous session.
The latest scandal comes after US-based short seller Hindenburg Research accused Adani companies of stock price manipulation and fraud in 2023, just as the group began a share offering meant to raise $2.5 billion. Last year, the Adani companies lost $68 billion in market value after Hindenburg Research accused Adani of “pulling the largest con in corporate history,” triggering a massive sell-off of the group's stocks.
