Adani powering BJP's electoral fortunes at expense of power consumers: Congress

The Congress on Tuesday (March 7) raised questions over what it said were Adani Group’s “shenanigans” in the power sector, alleging that it was powering the BJP’s electoral fortunes at the expense of Indian consumers.

The Opposition party also asked whether any of the investigative agencies that are “quick to investigate Prime Minister Narendra Modi’s political opponents” will look into “opaque transactions” of the Adani Group.

The Congress is persisting with its attack on the government weeks after Adani Group stocks took a beating on the bourses after US-based short seller Hindenburg Research made a litany of allegations, including fraudulent transactions and share-price manipulation.

The Gautam Adani-led group has dismissed the charges as lies, saying it complies with all laws and disclosure requirements.

Questions for Modi

Posing a set of three questions to Modi as part of the parties “Hum Adani ke Hain Kaun” series, Congress general secretary Jairam Ramesh said Tuesday’s questions relate to the Adani Group’s “shenanigans in the power sector, particularly the growing evidence that it is powering the BJPs electoral fortunes at the expense of Indian consumers”.

In February 2020, Adani Electricity Mumbai raised $1 billion (₹7,200 crore) in foreign debt from Asian investors, possibly including Chinese entities, Ramesh alleged.

Noting that senior secured notes were listed on the Singapore Stock Exchange, the Congress leader alleged this debt issue reportedly pledged the company’s entire equity capital and accepted stiff conditions that gave these Asian bondholders first claim on immovable and movable properties, book debts, operating cash flows, receivables and present and future revenues.

These lenders also hold the rights to Adani Electricity transmission and distribution licences that had been granted by the Maharashtra Electricity Regulatory Commission, Ramesh claimed.

Given the Adani Group’s financial stresses, what is the government doing to ensure that in case of a default, the electricity distribution of Mumbai does not fall into the hands of foreign creditors, especially the Chinese, he asked.

“What will happen to Mumbai if Adani Electricity, which supplies power to two out of three Mumbai households, defaults on this pricey foreign exchange loan?” Ramesh further asked.

The Adicorp ‘mystery’

He also said that Adicorp Enterprises is a small Ahmedabad-based firm with revenues of only ₹64 crore that borrowed ₹622 crore from four Adani Group firms and loaned ₹609 crore to Adani Power in 2019-20.

On January 29, the Adani Group claimed that Adicorp was not a related party which is why these transactions had not been appropriately disclosed, he said.

“Now we learn that Mukesh M Shah, an independent director and chairman of the audit committee at Adani Power, is also the founder and managing partner of the firm that audits Adicorp. How can any independent scrutiny of related-party financial transactions occur given these conflicts of interest?” he said.

Are these deep connections helping cover up alleged money-laundering and round-tripping by the Adani Group, Ramesh asked. “Will any of the investigative agencies that are so quick to investigate your political opponents look into these opaque transactions?”

“We earlier learned that, under the cover of your diplomatic initiatives, the Adani Group has been overcharging Bangladeshi consumers for electricity supplied from its Godda (Jharkhand) thermal power plant. The Gujarat state government has now acknowledged in a written reply that the average cost of electricity purchased from Adani Power has gone up 102 per cent, from ₹2.82 per unit in January 2021 to ₹8.82 per unit in December 2022,” Ramesh claimed.

Electricity bill amount

The total amount paid for electricity by the Gujarat government to Adani Power increased from ₹2,760 crore in 2021 to ₹5,400 crore in 2022, he added.

The Congress leader alleged that was possible only after the Gujarat government modified the power purchase agreement with Adani Power on December 5, 2018, giving Adani much more favourable terms.

“The entire country knows who runs Gujarat; did you exercise your authority to grant your favourite businessmen another bonanza, this time at the cost of Gujarats electricity consumers and taxpayers?” he said.

Ramesh urged the prime minister to break his “silence” on the issue.

With agency inputs