Chairman of the Adani Group Gautam Adani speaks during a press conference in Ahmedabad. - Indian billionaire Gautam Adani struck a $10.5-billion deal to buy Swiss cement giant Holcim's local business, the companies said on May 15, 2022, betting on a construction boom predicted in coming decades.
The indictment in the US of Gautam Adani, the billionaire chairman of Indian conglomerate Adani Group, for alleged involvement in a Sh34 billion bribery and fraud scheme is the latest chapter in a series of global fraud allegations against the company.
The Adani Group has faced controversies in multiple countries, stemming from accusations of financial misconduct, environmental violations, labour concerns and military links in Myanmar, after its ports was criticised for its business dealings with a Myanmar military-controlled company.
After the military coup in 2021, international sanctions targeted entities linked to Myanmar's junta, increasing scrutiny of Adani’s operations.
From intense protests in Kenya by opposition and rights activists over concerns about the government's accountability in its dealings with the company, now reinforced by the charges in the US, there seems to be no end in sight to the battles to stop the company's business in Kenya.
And on Thursday, outspoken Busia Senator Okiya Omtatah insisted that “Adani must be kicked out of Kenya. There are no two ways about it”.
“Concerns were raised about Public Private Partnership contracts with Adani Group involving Safaricom, Kenya Airports Authority, and Ketraco yet key regulatory bodies overlooked Adani’s past misconduct during approvals.
“Due diligence was compromised and someone needs to take responsibility.
We need accountability among public servants to prioritise Kenya over corruption and self-serving interests,” Mr Omtatah charged.
On Wednesday, authorities in the US said Adani and seven other defendants, including his nephew Sagar Adani, agreed to pay about $265 million (Sh34 billion) in bribes to Indian government officials to obtain contracts expected to yield $2 billion (Sh259 billion) of profit over 20 years and develop India's largest solar power plant project.
Prosecutors also said the Adanis’ and another executive at Adani Green Energy, former CEO Vneet Jaain, raised more than $3 billion (Sh387 billion) in loans and bonds by “hiding their corruption” from lenders and investors.
But even as the fraud allegations against the multi-billion company were laid bare, Energy and Petroleum Cabinet Secretary Opiyo Wandayi defended the continuation of the Sh95.7 billion Ketraco-Adani project in Kenya.
"We have an elaborate mechanism for undertaking due diligence. The PPP directorate, in coordination with Ketraco, conducted two phases of due diligence.
“Phase I involved a documentary review of soft copy documents provided by the proponent to demonstrate their legal, technical, financial, and logistical capabilities," he told a parliamentary committee on Thursday.
Several countries grappling with Adani’s footprints have only intensified fears over its integrity to continue operating in Kenya.
Recently, huge protests were witnessed in Bangladesh over energy pricing disputes, as the company faced backlash over alleged high pricing for electricity supplied to Bangladesh from its coal plants, raising concerns about exploitation and unfavourable terms in power agreements.
Bangladesh is currently ramping up payments to Adani Power after the Indian conglomerate cut electricity supplies by half, reportedly over an unpaid $ 800 million bill.
Adani supplies Bangladesh from its 1600 megawatt coal-fired plant in eastern India.
The company has not been spared controversies even in India where it has faced accusations of stock price manipulation and accounting fraud after a report by US-based short-seller Hindenburg Research in January 2023.
This led to a significant loss in market value and global scrutiny.
Frozen billions in Switzerland
The company also hit the headlines in September after Sh39.99 billion was frozen in Switzerland over money laundering allegations.
Court documents show that a man who had dealings with five Swiss banks is being investigated by the Swiss attorney-general.
More than $310 million (Sh40 billion) was been frozen as a result of the investigation.
A number of platforms have linked the man to the Adani Group, but Adani vehemently denied any connection.
Adani’s coal mining and port operations in India have also been criticised for their environmental impact, including displacing communities and harming ecosystems.
The group's close ties with the Indian government, particularly Prime Minister Narendra Modi, have sparked allegations of crony capitalism.
Last month, ODM leader Raila Odinga, an ally of Mr Modi, in a surprise move defended the Adani Group as a reputable firm but added its entry to Kenya may be hindered by ineffective legal frameworks.
The company, he said, had shown interest in investing in Kenya since 2010 when he was Prime Minister under the then Mwai Kibaki's coalition government.
Mr Odinga had insisted that given the current financial status of the country, Public Private Partnership (PPP) is the only way out for cash-intensive projects.
“If we plant doubts in our capacity to handle PPPs, we must be prepared for a prolonged period of development drought and risk being overtaken by our neighbours,” he warned.
He said that the ongoing Energy and airport projects present a critical test that could make or break Kenya’s ability to compete in the field of infrastructure development for a considerable period.
The company has also been flagged in Australia, with its large-scale coal mine in Queensland put on the spot over its potential impact on the Great Barrier Reef.
Concerns about carbon emissions and climate change, attracted huge opposition from indigenous groups and environmental activists.
In 2021, Sri Lanka also faced protests over Adani-linked port project controversies.
It was put on the spotlight over a proposed renewable energy project, with critics claiming the deal was awarded without competitive bidding and under Indian government influence.
In Indonesia, the company was also criticized for environmental degradation and labour rights violations related to its coal mining activities in the country.
These controversies highlight challenges related to environmental, social, and governance (ESG) compliance and have led to global scrutiny of Adani’s business practices.
Just as in Kenya, in Mauritius,Adani-linked funds drew scrutiny for their lack of transparency and ties to alleged tax avoidance schemes.
Despite the negative global trends by the company, the Kenyan government led by President William Ruto has defended the company’s projects in pipeline.
For instance, President Ruto, defended the multi-billion-shilling power transmission projects awarded to the Adani Group under the Public-Private Partnership (PPP) framework, urging Kenyans to embrace such initiatives.
He emphasised that private-sector financing would ease the tax burden and reduce dependence on loans.
Speaking in Nakuru during the recent ground-breaking ceremony of the 35-megawatt Orpower 22 Power Plant at the Menengai Geothermal site, Dr Ruto lauded the Adani Group’s investment in the project.
“The Adani Group is investing Sh95 billion of its own money in the transmission line. Had we borrowed that money, it would have burdened the people of Kenya. This is now a private-sector investment, similar to the Naiorbi Expressway,” the president said.
The Kenya Electricity Transmission Company Limited (Ketraco) signed the project agreement with Adani Energy Solutions Limited last month.
“I am pleased to announce the successful signing of the Project Agreement between the Kenya Electricity Transmission Company Limited (Ketraco) and Adani Energy Solutions Limited (the Project Company).
“The agreement marks the beginning of a transformative initiative to develop, finance, construct, operate, and maintain key transmission lines and substations across Kenya,” Energy and Petroleum CS Opiyo Wandayi announced shortly after inking the deal early last month.
