The reports of arrest warrants were issued in the United States for Gautam Adani and his nephew Sagar Adani, after a grand jury in New York indicted the business tycoon and seven others on charges of bribery of $265 million (around Rs 2,029 crore) on Wednesday, rocked the share market.
But this is not the first time that Adani group has been accused of wrongdoings. A couple of days ago, it was reported that the Bangladesh government will form a high-level inquiry committee, consisting of energy and legal experts, to re-examine the country’s power purchase agreement (PPA) with the billionaire Gautam Adani-led Adani Group signed in 2017. The move was directed by Bangladesh’s high court on Tuesday.
In August this year, US-based short-seller Hindenburg Research took on the Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch. The report claimed that Buch has a conflict of interest. It alleged that Buch and her husband, Dhaval Buch, owned a stake in certain offshore entities related to the Adani Group. Gautam Adani's brother Vinod Adani allegedly used those entities in an alleged money laundering scandal.
Madhabi Puri Buch and Dhaval Buch denied all the allegations made by the US-based short seller. Adani Group of companies’ shares took a hit again on the stock market, wiping off $2.4 billion in one trading day. The losses were less than when compared to $13 billion after the first Hindenburg report on Adani.
Last January, US-based short seller Hindenburg Research released its original report on January 24, 2023, against the Adani Group, titled ‘Adani Group: How The World’s 3rd Richest Man Is Pulling The Largest Con In Corporate History’.
The report alleged that the conglomerate was “engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades”. It also accused the Adani family members of creating offshore shell companies in tax haven countries such as Mauritius, the UAE, and the Caribbean Islands, using forged import-export documentation to show fake revenue, and laundering money from their listed public companies, as per the report. However, the conglomerate denied all the allegations.
There has been a protest campaign in Australia to stop Adani's Carmichael coal mine. The protesters allege Adani's Carmichael coal project is trashing First Nations land rights, draining critical water resources and risking the already distressed Great Barrier Reef.
Within India also the Adani group has been facing protests. Adani Properties received the 259-hectare Dharavi redevelopment project in November 2023. The deal has triggered protests, and Maharashtra Opposition leaders and workers led thousands of protestors to Gautam Adani’s Mumbai offices. Protestors used flags and banners bearing slogans like “Remove Adani, Save Dharavi.” They were concerned that the company would benefit from the redevelopment project rather than the people living in Asia's biggest slum.
Now the latest reports show that Kenya has cancelled $730 million proposed deals with Adani Group after the US indictment. This is bad news not only for Indian and foreign investors who have put their money in the company, but also the nation’s image, which has taken a huge beating. From here on, foreign countries and companies will be reluctant to deal with India. This will take a huge toll on our economy.
India adopted the ‘Socialist’ model of economy after its Independence. The term 'Socialist' in the Preamble of our Constitution was added by 42nd Amendment Act, 1976. It provides that the State has a responsibility towards citizens for their welfare, abolishing discrimination, nationalisation of means of production, equal distribution of wealth and securing justice for all.
Sadly, the ‘Socialist’ India has now been unofficially replaced by ‘Capitalist’. While India has traditionally followed a ‘mixed economy’ model, with more tilt towards socialism, but as time passed by, circumstances forced India to open up its markets and embrace capitalism. Now, such is the situation that the political leadership directly patronises industrialists.
This is known as crony capitalism, a term mostly used with the West, especially the US. Unfortunately, this term is now being used for India as well. While India is one of the fastest growing economies in the world, it is also one of the most unequal countries.
The rich are getting richer at a much faster pace while the poor are still struggling to earn a minimum wage and access quality education and healthcare services.
Every country needs a strong private sector to support the economy in terms of wealth generation, employment opportunities and efficient service delivery, but that does not allow it to rule over its people.
The growing trend of crony capitalism must stop as it is like a slow poison that will finish us from within eventually. Unfortunately, our politicians have remained oblivious to this grave danger due to their vested interests.