Adani's indictment in US triggers political upheaval in Delhi

The Opposition’s INDIA bloc, sombre but cautiously optimistic since Tuesday (November 20) evening’s Exit Poll predictions of a possible BJP-led NDA win in the Maharashtra and Jharkhand Assembly polls, got a major pick-me-up all the way from the USA early Thursday morning as Adani Group Chairman Gautam Adani was indicted in a USD 265 million bribery scandal by prosecutors in New York.

“A five-count criminal indictment was unsealed today in federal court in Brooklyn charging Gautam S. Adani, Sagar R. Adani and Vineet S. Jaain, executives of an Indian renewable-energy company (the Indian Energy Company), with conspiracies to commit securities and wire fraud and substantive securities fraud for their roles in a multi-billion-dollar scheme to obtain funds from U.S. investors and global financial institutions on the basis of false and misleading statements,” read a statement issued by the US Attorney's Office, Eastern District of New York.

Also read: US indictment against Gautam Adani could spark international probes, investor exodus

Arrest warrant against Gautam Adani

Hours later, Reuters reported that arrest warrants had been issued in the US for Gautam Adani, his nephew Sagar Adani and others in the bribery scandal.

The development in New York has triggered a political upheaval back in New Delhi ahead of Parliament’s winter session that is scheduled to commence on Monday (November 25). Rahul Gandhi, the Lok Sabha’s Leader of Opposition who has, for the past several years, been vociferously attacking Prime Minister Narendra Modi for running a crony capitalist nexus with Adani, demanded that the controversial business tycoon be “arrested immediately”. Rahul also reiterated the persistent demand by his party, the Congress, and other members of the INDIA bloc to institute a Joint Parliamentary Committee (JPC) inquiry into the multiple allegations of financial irregularities, corruption and stocks manipulation that have been levelled against Adani and his group of companies time and again.

Also read: Allegations against directors ‘baseless and denied’, says Adani Group

“It is clear now that Adani has broken both Indian and American laws, so why is he still a free man in this country... the Prime Minister must stop protecting Adani and he should be arrested immediately but I am also absolutely certain that nothing will happen (to Adani) because the Prime Minister is standing firmly behind him,” Rahul told the media at the Congress headquarters in New Delhi.

'Modi's credibility obliterated'

Asserting that the indictment by the US Department of Justice in the “over Rs 2,000 crore bribery scam” has “proved what we have been saying for long”, Rahul claimed that Modi’s credibility stood “obliterated”.

Also read: Gautam Adani not new to ‘trials’; he survived a kidnapping and 26/11

Congress sources said the party’s top leadership was already in talks with “all senior leaders of the INDIA bloc” to thrash out a strategy to corner the Centre during Parliament’s winter session on the Adani affair. Sundry other constituents of the INDIA bloc too have reacted sharply to the development in the US demanding a “thorough inquiry in India” against Adani.

“This is Modi & BJP’s legacy - to run the biggest global kleptocracy. Selling out India’s resources & infrastructure to one corrupt crony at taxpayer & poor’s expense. FBI + DOJ + US SEC investigation indicted not only Adani but India’s government, regulators & rotten system (sic),” posted Trinamool Congress MP Mahua Moitra on X.

The CPI-M politburo too issued a statement calling for a “full-fledged investigation by an independent agency” into the allegations made out in the US indictment. “The indictment states that Rs 2029 crore was offered or promised to Indian government officials to get state electricity distribution companies to execute power sale agreements for the supply of solar power. The case has come up in the US as the charge is that US investors were misled by the Adanis... It is shameful that such large-scale bribery and suborning of government officials by the Adanis had to be exposed not in India but in the United States through their criminal justice system,” the CPM statement said. It added further, “Gautam Adani and his business empire have had the full protection of the Modi government to execute his unlawful and criminal activities. Prime Minister Modi himself had shielded Adani from any inquiry or prosecution on the charges emanating from the Hindenburg expose”.

BJP rejects Congress's demands

RJD MP Manoj Kumar Jha echoed similar views, asserting that the “Modi government now has nowhere to hide... they cannot wish this indictment away or call it the product of an Opposition conspiracy; this indictment is the result of an investigation conducted by the FBI and analysed by the US Department of Justice”.

Watch | Explained: Anti-Adani protests in Kenya and secrecy surrounding Nairobi airport deal

It is not difficult to gauge why the US DOJ’s action against Adani is potent ammunition for the Opposition back in India. Ever since US-based short seller Hindenburg Research published its first “expose” against the allegedly dubious financial and market manipulation practices of the Adani Group, the Opposition had been vociferously demanding a JPC probe against Adani to “expose the Modi-Adani nexus”.

The BJP, however, had sought to reject these demands and the Opposition’s allegations by asserting that Hindenburg Research was merely a short-seller who stood to benefit from making such “baseless allegations” and that the Indian market regulator, SEBI, as well as other Indian authorities had found no wrong-doing on part of the Adani Group. The Supreme Court, which had directed a SEBI probe against the Adani Group following the Hindenburg accusations, too had done precious little in the matter; ostensibly handicapped by the Centre’s stonewalling.

Over the past two months, however, the Congress party seems to have adopted a different approach to expose the alleged Modi-Adani nexus. The party’s media wing chief, Pawan Khera, had been routinely addressing the media about “investigations" carried out by his team into SEBI chief Madhabi Puri Buch. The ‘revelations’ made by Khera in these briefings were damning as they unravelled a treacherous web of visible financial and administrative impropriety by Buch.

Khera has, on multiple occasions, said that the allegations against Buch proved how the SEBI had been compromised and that the net result of this was the “illicit and criminal” benefits that were rolled out for “Modi’s friends like Adani”.

The Congress and its INDIA partners believe that Adani’s indictment also tightens the noose around Buch’s neck and the SEBI chief has been evading an appearance before Parliament’s Public Accounts Committee. The PAC, headed by key Rahul Gandhi aide and Alappuzha MP KC Venugopal, had decided to institute a suo motu review of the SEBI’s functioning. Buch had been summoned to depose before the PAC for the review but, at the last moment, cited a “personal exigency” and evaded the summons. Sources said a fresh summons is likely to be issued to Buch later this month.

Rahul: 'Probe all contracts given to Adani'

Sources in the BJP told The Federal that the latest round of allegations against Adani is “by far the most damaging” that Modi has faced over his relations with the controversial billionaire but that the party has “no option but to brazen it out”. Expectedly, at its official briefing, BJP MP and spokesperson Sambit Patra launched a counter-offensive against the Congress claiming that Indian states named by the US Court in connection with the bribery charges brought against the Adanis had “had governments of the Congress or their allies”, even as he sought to distance his party from the Adani group and its chairman.

“The matter relates to the agreement for sale and purchase of electricity, and the agreement with state distribution companies. Which are the four states mentioned in the US court? The matter pertains to the time between July 2021 and February 2022. Chhattisgarh, Andhra Pradesh, Tamil Nadu and Odisha all had non-NDA governments at that time. They had neither our CMs nor ruling parties supported by us,” Patra said.

Patra said that Adani had also “invested Rs 25,000 crore in Chhattisgarh when Congress’s Bhupesh Baghel was the state’s CM, Rs 65,000 crore in Rajasthan when Ashok Gehlot was the CM, Rs 35,000 crore in West Bengal, Rs 60,000 crore in Andhra Pradesh, Rs 4,500 crore in Tamil Nadu, and promised Rs 1-lakh crore of investment in Karnataka under a Congress government”.

By alluding to investments made or promised by the Adani group in states formerly or presently ruled by Congress and other non-NDA parties and asserting that Adani was a “private individual” who the BJP needn’t answer for, the saffron party hopes to break the impression that the beleaguered businessman favoured only Modi and states ruled by his party. Rahul, however, somewhat turned the tables on this line of BJP’s attack by asserting that an investigation must be instituted against “anybody and any government, irrespective of the party if there is corruption”.

“I want them to probe all contracts given to Adani... if there is corruption, there has to be an impartial investigation, no matter which party,” Rahul said while asserting that Modi and Adani had together built a “political-bureaucratic-financial network” that needs to be exposed and dismantled.